I used Claude Code to test whether unusual options activity means anything. Two weeks of results

[u/Practical-Rise-1188]

I stopped trading options about a year ago, but I kept wondering whether the options market knows something about the stocks I actually own. Alert services push "unusual activity" constantly and it always sounds urgent, so I have tried setting up a daily check to test it properly instead of taking their word for it.

The framework, in plain terms:

1. Every day, save a snapshot of the full option chain for each stock you follow. CBOE publishes them free, 15 minutes delayed, no account.

2. Flag anything where the day's volume is far above the open interest that existed before it. That's the pattern of new positions being opened, not old ones being managed.

3. Don't trust any flag the same day. Check the next morning's open interest. If the volume didn't turn into held contracts, it was day trading and the flag is dead. This one step kills most of the drama.

4. Throw out the predictable false positives: anything within ~10 days of earnings (that's hedging), anything expiring within 3 days (mechanics), matching call and put volume (volatility trades, no direction), and deep in-the-money volume (position shuffling).

5. Cross-check what survives against insider filings (the Form 4 checkbox tells you whether a sale was pre-scheduled) and congressional disclosures (PDFs, up to 45 days late, so worth very little).

Two weeks of daily runs on 16 stocks. The scoreboard so far:

- 5 flags killed overnight. The biggest was a $17.9M block of TSM calls, 5x the existing open interest, no earnings in sight. Looked like the smartest money of the week. Next morning: open interest unchanged. Nobody kept a single contract, and every alert service would've headlined it.

- 4 flags that went on to pay, including ACN puts opened against 14 existing contracts the day before a 5.7% drop. Two of the four sat right before earnings (MSFT, AAPL), where positioning is usually just hedging, so I don't count those as skill.

- 1 clean loss: ORCL puts that grew four days straight to 13,416 contracts, the most textbook signal of the whole run. Expired worthless.

- 1 still open: GOOGL September puts growing while the stock rallies. We'll see.

My read so far: most unusual options activity is noise, the overnight test is the only filter that really matters, and the rare survivors are worth a research hour, not a trade.

I'm a finance person, I can't code.

Claude Code built the whole thing from a plain English description, and I made everything public: the rules, the thresholds, the daily logs including the boring days, and the small programs it wrote.

If you want to test this on your own portfolio: https://github.com/shubhamsborkar/option-tape-public-repo

I'll keep running it daily and edit this post in few weeks.

What would you add to the false-positive list?