Options flow is the record of buying and selling activity in options contracts, and it is the raw material behind James Altucher’s “Blue Spike” indicator. The pitch claims an AI system can spot a “blue spike” in options data that has supposedly appeared before most of Wall Street’s biggest buyouts. To judge that claim, you need to understand what options flow is and what it can and cannot tell you. We break down that angle in our Unusual Options Activity: What You Need to Know piece.
What Options Flow Measures
Every options contract that trades is recorded, and the data includes the strike price, the expiration date, and whether the trade was a buy or a sell. “Flow” refers to the aggregate of that activity, and unusual flow means activity that is out of the ordinary for a given stock: a sudden surge in call buying at a specific strike, or a large volume of contracts that expire on a nearby date.
The theory behind reading flow is straightforward. Options are leveraged and expire, so a trader who knows something important, a coming announcement, an imminent deal, tends to buy short-dated calls rather than quietly accumulate stock. Large, aggressive call buying ahead of a catalyst can therefore be a leading indicator that somebody with money is positioning for a specific outcome. That theory is real, and it is the intellectual basis of the entire pitch.
What Flow Cannot Tell You
What options flow cannot tell you is why the trade happened, and this is where the pitch gets slippery. A surge in call volume could mean a takeover is coming. It could also mean a hedge fund is hedging, a market maker is adjusting inventory, or a group of retail traders is chasing a rumor. The same unusual activity can mean completely opposite things.
The pitch’s own numbers illustrate the gap. The “87.3% of the biggest buyouts” claim says blue spikes appeared before most large buyouts. It does not say how often a blue spike fired with no buyout following. That false-positive rate is the number that determines whether following every signal makes money, and it is never disclosed. Altucher says the system recommends roughly two trades a month, which means blue spikes are common, and a common signal that occasionally precedes a takeover is very different from a rare signal that reliably predicts one.
The Specific Setup
The Blue Spike pitch points at unusual volume in the teased company’s near-dated calls, clustered in the November and December expirations at strike prices well above the current share price. The heaviest action is in the December $95 call, trading over $8. That price matters, because it means the market is already charging a meaningful premium for exactly the takeover scenario the pitch is selling.
In other words, a late reader is not getting a quiet, undiscovered signal. The option the pitch wants you to buy is already priced for speculation, which means the “get in before headlines” framing overstates how early you are. The flow signal may have been real when it first appeared; by the time it is in an ad, the crowd has already paid up for it.
For how the flow maps to the underlying stock, read our Viasat stock breakdown, and see the event-driven investing piece for the strategic context.
Reading Flow Without Getting Fooled
If you want to use options flow yourself, the discipline is to treat it as a starting point, not a conclusion. A spike in call volume tells you that someone is positioning, but it does not tell you who, why, or whether they are right. The useful next step is to look for corroboration: a filing, a leak, a change in fundamentals, anything that would independently explain the activity.
The absence of corroboration is itself information. Unusual flow with no supporting catalyst is often noise, or a hedge, or a rumor being chased by other traders. Unusual flow that arrives with a concrete catalyst is more meaningful, because the activity and the event point in the same direction.
The Blue Spike pitch inverts this discipline. It presents the flow itself as the catalyst, treating the signal as the event rather than as a hint of one. That is why the false-positive rate matters so much. A signal with a low base rate of being right is only useful if you also know how often it is wrong, and the pitch never tells you that half of the equation.
The Honest Read
Options flow is real data, and unusual call buying can genuinely be a leading indicator. But it is noisy, it is easily misinterpreted, and by the time a specific setup is packaged into a promo, the edge has usually been priced away. The signal is worth understanding; the claim that it reliably predicts takeovers is not supported by the one number the pitch never shows, the false-positive rate.
Ready to see the research? Click here to access James Altucher’s report.
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