What flow shows: large premium spent on specific strikes (positioning bets), unusual volume relative to open interest (new positions vs liquidation), and bid/ask aggression (whether the buyer or seller is initiating). Specific patterns to watch: massive long calls at OTM strikes (institutional speculation), large short put blocks (institutional willingness to own at strike), and matching call/put volume at the same strike (delta-hedging or synthetic positions).
Caveat: flow is a noisy signal. Most large blocks are hedges or rebalancing trades, not directional bets. Reading flow requires distinguishing signal from noise — looking for clusters across strikes and expirations rather than reacting to single trades. Flow is best used as confirmation for an existing thesis, not as a stand-alone trade trigger.