Net Premium Flow: the directional verdict that aggregates every UOA signal
How Lonqua turns hundreds of daily unusual-activity signals into a single net verdict per symbol by summing bullish and bearish premium, readable in under five seconds and refreshed every fifteen seconds.
500 signals a day, one verdict per ticker
Lonqua's UOA Screener typically detects between 400 and 600 unusual-activity signals every trading day. That is a huge amount of raw information, and a trader reading alerts one by one would quickly drown without ever knowing which signals actually matter for a given symbol.
Take a concrete example. On NVDA this morning, the engine flagged 47 bullish signals and 12 bearish ones. Directional verdict? Ambiguous at first glance. But if one of those twelve bearish trades accounts for $10M of institutional premium on its own, while the 47 bullish ones average $500K each, the net verdict changes drastically.
That is exactly what Net Premium Flow (NPF) computes: the net dollar sum of the premium committed on the bullish side minus the bearish side for each symbol. A single number answers the question "overall, who paid how much, in which direction?"
What is Net Premium Flow?
Net Premium Flow measures the net direction of an options flow by summing bullish-side and bearish-side premium, then subtracting one from the other. The result is a single figure per symbol, expressed in net dollars, positive when the flow is bullish and negative when it is bearish.
The key detail that distinguishes NPF from a plain volume-based Put/Call Ratio is that it thinks in dollars of premium actually committed, not in contract counts. An order for 10,000 contracts at $0.05 represents only $50K of premium; an order for 500 contracts at $12 represents $600K. The second reflects a much more serious conviction, and that is what moves the NPF needle. The indicator therefore favours real financial conviction over raw ticket counts.
Second critical ingredient: every trade is classified bullish or bearish in real time via the OPRA condition codes that ship with each print. A call bought at the ask (lifted price) is an acknowledged bullish vote, paid through the spread. A put bought at the ask is bearish. Conversely, a call hit at the bid or a put hit at the bid belong to the opposite camp. Classification happens trade by trade, with no intermediate step or probabilistic model.
How Lonqua computes NPF
The engine draws from the same OPRA feed as the UOA Screener, with a 15-second refresh cycle. For every covered symbol, Lonqua aggregates two distinct buckets from the trades printed in the rolling window:
Calls bought aggressively (ask-side) and puts sold aggressively (bid-side). Both moves translate into a net bullish conviction on the underlying, paid through the spread.
Puts bought aggressively (ask-side) and calls sold aggressively (bid-side). An operator paying up to open a downside position or aggressively closing a long call.
For every trade, the committed premium is simply price × quantity × 100 (each contract covers 100 shares). The two buckets are summed in dollars, then subtracted to produce the symbol's NetPremium:
If the result is positive, the card reads BULLISH. If negative, it reads BEARISH. The bullishPct / bearishPct ratio is computed in parallel to enable an instant visual reading as a split bar.
Unlike tools that work on fixed 24-hour windows, Lonqua's NPF is computed on a sliding execution window with a configurable expiration horizon (short, mid or long term, detailed below). That avoids stale-session bias and reflects the live state of the market.
Anatomy of an NPF card
Here is how an NPF card shows up for NVDA inside the Flow Radar:
Each field, read in under five seconds:
- Direction BULLISH :NetPremium is positive. Aggressive capital on NVDA is clearly leaning bullish over the analysis window.
- Net +$12.4M :after subtracting the $25.7M committed bearish, $12.4M remains net bullish. This is the most important number on the card.
- 72% / 28% bar :the visual equivalent of the bull/bear premium ratio. Useful for telling a massive verdict (90/10) apart from a fragile one (55/45).
- Volume 45.2K contracts :total liquidity transacted. A directional verdict on 500 contracts is less reliable than the same one on 45,000.
- Total premium $38.1M :gross capital engaged in both directions combined, useful to gauge institutional presence.
- PCR 0.42 :the premium-based Put/Call Ratio, providing a second independent reading. Below 0.7, the zone is green, signalling a bullish consensus on the underlying.
Put/Call Ratio and its three zones
PCR is an old metric but still powerful. Lonqua displays it on every NPF card and interprets it through three colour-coded zones:
The thresholds are not set at 1.0 by accident. Statistically, US markets have a natural long bias over the long run, and the historical average PCR sits slightly below 1. The 0.70 and 1.20 boundaries build in that bias to avoid labelling an average ratio as "bearish".
Short, mid, long: NPF's three horizons
A flow signal carries a different meaning depending on the expiration of the option involved. Buying calls that expire next week reveals an intraday or swing conviction, while buying six-month calls points to structural positioning or a hedge. NPF therefore applies an expiration-window filter with three horizons:
Tactical directional positioning, imminent events (earnings, CPI, FOMC). High sensitivity to gamma and theta.
The operational sweet spot: enough duration to reflect conviction, measured time decay, limited expiration-week noise.
Structural positioning, portfolio hedges, LEAPS. Reveals deep institutional conviction.
An "All horizons" filter combines the three for a consolidated view. The mid-term horizon is the recommended daily starting point: it filters out weekly-expiration noise without diluting the signal into distant positioning.
Three concrete ways to use NPF
Validate an isolated UOA signal
Before acting on a bullish sweep on NVDA, check the symbol's NPF card. If NPF is also bullish, the signal is confirmed. If it is bearish, tread carefully: the individual trade may be an isolated hedge.
Scan the day's pivots
Sort symbols by descending NetPremium. The five most bullish and five most bearish of the session typically concentrate most of the directional alpha you can act on in a 3-10 day swing.
Monitor a portfolio holding
On a long-term holding, watch its long-term NPF over several days. A shift from bullish to bearish on the 45d+ window is often the earliest signal that institutions are stepping out.
UOA and NPF: two sides of the same coin
UOA Signals and Net Premium Flow are not competing tools. They answer two different questions in the same analysis process.
Row-level granularity. Every unusual trade is displayed individually. You see in real time that a $2.85M block just printed on NVDA $950 C.
Symbol-level granularity. The full options flow for a symbol is rolled into one net dollar value, giving you the global directional verdict.
The recommended workflow is simple: discover via UOA, confirm via NPF, contextualise via GEX Screener and Morning Briefing. Each layer removes a false positive that the previous one could not have caught alone.
What NPF cannot do
NPF is a positioning indicator, not a predictive model. A few structural limits worth knowing:
- NPF does not tell you WHEN :it tells you the direction of committed capital, not the timing of the underlying's next move. A net bullish flow can precede a move over 48 hours or over three weeks.
- It cannot tell a hedge from a directional bet :a large bullish flow on SPY can be portfolio protection for a short book rather than a long bet. Broad-based ETFs are especially prone to this bias.
- It is instantaneous, not historical :today's NPF does not predict tomorrow's. Its value lies in the real-time reading, not in retrospective analysis.
- It depends on underlying liquidity :on an illiquid small-cap, a handful of large trades can artificially flip the verdict without reflecting a genuine market trend.
Golden rule, same as for UOA: no single indicator justifies a position. NPF should be cross-referenced with at least the GEX Screener for technical context, and ideally with the Morning Briefing for daily macro context.
Who NPF is for
Day traders
To pinpoint, in 10 seconds, the five most lopsided tickers of the morning and focus intraday attention on the most probable pivots.
Swing traders
To validate a 3 to 10-day directional thesis by cross-checking mid-term NPF with technical analysis and macro calendar catalysts.
Long-term investors
To monitor long-term flow on portfolio holdings and catch institutional reversals well before they show up in price.
Try Net Premium Flow on Lonqua
Get the real-time directional verdict on the main US tickers, expressed in dollars of committed premium and refreshed every fifteen seconds. The Free tier already lets you view the three most active symbols.