All that matters is that they might know something we dont know and that something is expected to move the price of the stock in a big way. Insiders offer one easy explanation for the source of unusual options activity. , Item Weight 3 talking about this. In the meantime, be sure to follow Jons regularly scheduled, Rebellion-exclusive shows inside the Rebel Hub. In effect, it is a gauge of interest in the contract at any point in time. Open interest is measured once a day at the end of the day. Market Rebellions reference to specific securities or Digital Assets should not be construed as a recommendation to buy, sell or hold that security or Digital Asset. There are other factors that could make it less unusual. The market is too big and too humbling for us to expect that. Jon and Pete Najarian pioneered Unusual Options Activity trading strategies to follow the "smart money". It just means that they passed the first level test. Three Keys to Identifying UOA. Market Rebellion specializes in unusual options activity trade ideas. You recognize that you are not required to provide this consent as a condition of purchase and that you can withdraw consent at any time. Brief content visible, double tap to read full content. Starting in March 2022, we began identifying unusual call buying in social media giant Twitter (TWTR). Tune in and get fresh stock market insights from Jon and watch him unveil the latest in Unusual Options Activity. The trade breaks even at $19.15 or 9.12% above the current stock price. Pete Najarian spoke about Dropbox Inc (NASDAQ: DBX). When done properly and viewed in the context of a complete portfolio, however, it can be a powerful tool for your portfolio. Thats where experience and added research come into play. For example, popular ones look at the ratio of volume to open interest in a particular option. If you do not want us and our partners to use cookies and personal data for these additional purposes, click 'Reject all'. Around 4,000 contracts of the January $43 calls were traded for about $1.10. Market Rebellion is not giving investment advice, tax advice, legal advice, or other professional advice. You know it when you see it. Besides the fact that the volume is high, the fact that it exceeds open interest tells us without a doubt that the trade is an opening order. Watch our free 7-minute tutorial on how pro traders harness unusual option activity. , , . . Najarian jumped in the trade and he is going to . Every time he tells me about Pete and John's unusual call option activity it ALWAYS ranks. Around 10,000 contracts of the November 35.50 calls were trade and there was also some volume in puts, but Pete Najarian sees the put options activity in Pfizer as protection buying. Is there a methodology to controlling risk in the trade? Dont miss Making Money With Charles Payne, today on Fox Business! Specific securities or Digital Assets are mentioned for educational and informational purposes only. We are sorry. Sanofi SA SNY was also active. Instead, its a way of trying to tilt the odds in our favor; a way of setting up a portfolio of trades with a goal of a positive return. Almost 16,000 contracts . But theres another explanation for the Smart Money in unusual options activity: Wall Street hedge funds, pension funds, and other big money traders amassing huge positions. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. Remember, were looking for activity that Smart Money traders are making. And these are exactly the times (ahead of major market events) that they may be active. Jon Najarian, a 16-year contributor to a variety of CNBC programs including Worldwide Exchange, The Halftime Report, Fast Money, and Power Lunch, has reached a mutual agreement with CNBC to discontinue his exclusive contributor contract with the network to enable him to pursue other media ventures, including building out the programming at Market Rebellion. Try Unusual Option Activity Essential. Theyll be talking options trading as they break down the latest market action in the midst of a jam-packed week of earnings. If you are someone who doesnt learn easily , doesnt commit, or are lazy, dont kid yourself, dont buy. These can be a good place to start, but are often cluttered with a lot of noise, like hedges and multi-legged option strategies, that can lead you astray. This is not a waste of time. That means, not only are they putting a lot on the line to make a bearish bet theyre predicting that the move will be big. And thats an exchange we are happy to make. As individual traders, we focus on capitalizing while these big funds are still amassing their market-moving position. Why would someone seemingly throw away a large amount of money? Silvergate Capital Just Got Cut in Half. More than 10,000 contracts of the October $15 calls were traded for 20 cents in the first half of the session. The book is an easy read with basic concepts but there are many better books available. The Najarian brothers and Jim Cramer are just journalist with their own hidden agendas. Their goal is to be inconspicuous. Below is a chart that maps the likelihood flagged activity will trigger an unusual options activity trade idea based on the factors that we use as inputs in the unusual options activity scanner. Jon Najarian noticed high options volume in the November 205 calls in NVIDIA Corporation NVDA ahead of earnings. Yes, that means we pay more than if we bought out-of-the-money options, but it also means that we lower the amount of potential profitability. Because of the inherent leverage that it offers, the ripples of Smart Money behavior are more easily seen by looking at options order flow than looking at trading in the stock market. Follow the Smart Money is a page turner and will open your eyes towards better strategic trading. The options he does DD on and trades almost always do well. For example, around some major news events, the implied volatility measure may prove less important. BTW - I dont think there is an easy way to learn the Greeks. He already owns the stock and he believes it has some upside potential, because it's lagging behind Wynn Resorts, Limited WYNN. Ultimately, the stock kept surging from the $9 price point to above $60, before its price eventually fell back to earth. Lets add one more ingredient: what if those 10,000 out-of-the-money put options were expiring next week? Check out Unusual Option Activity Pro. While there is a formula, it is not exactly straightforward. It might. Not sure where to start? Do Not Sell My Personal Data/Privacy Policy. If you are interested in trade ideas or alerts triggered by unusual options activity, here are some questions that you may want to consider before choosing a trade alert service: As mentioned above, trading unusual options activity based on one criterion (e.g., volume of the trade is greater than open interest) is too simple. From there, we filter even further with a mixture of the criteria above. By clicking below, you also agree to our Terms of Use and acknowledge our Privacy Policy. When the stock was trading at $25, options traders began buying the December $30 calls. Jon Najarian, a 16-year contributor to a variety of CNBC programs including Worldwide Exchange, The Halftime Report, Fast Money, and Power Lunch, has reached a mutual agreement with CNBC to discontinue his exclusive contributor contract with the network to enable him to pursue other media ventures, including building out the programming at Market Everyone is looking for an edge in the market. We think about how the trade will perform as the price of the stock moves and time decay sets in. GLUU is a stock that often flies under the radar of most traders so when we saw these colossal back-to-back option trades, we flagged it immediately for its highly bullish sentiment. Instead, they got a model of a tarp,, 1 Primary Trade Idea + Bonus Trades Per Week, LIVE Q&A Session With Lead Instructor Bill Johnson, 8 Times Retail Traders Did Something Amazing. This is the date by which an option either has to be exercised or the contract is void. You can change your choices at any time by clicking on the 'Privacy dashboard' links on our sites and apps. Our services and education products provide information from Jon Najarian, Pete Najarian and our team of analysts and educators on trading options and securities as well as cryptocurrencies, tokens and coins (together Digital Assets). Yes, that means that we pay more than if we bought out-of-the-money options, but it also means that we lower the amount of potential profitability. Unusual options activity is how we Follow the Smart Money in our trades. Every day, Market Rebellions Heat Seeker algorithm flags dozens of potential trades. Whether we're talking about thousand-dollar donations to food banks, tables-full of video game. He loves the trade and he decided to follow it. Trading based on unusual options activity works to align our positions with those of Wall Streets Smart Money, those with insider knowledge of upcoming news or important information that can move the price of a stock. Follow The Smart Money is an excellent book for those who are interested in learning about options, the stock market, and unusual options activity. She is a popular actress, and was featured in the show Wall Street . On February 8, it was announced that Electronic Arts (EA) was buying GLUU for $12.50 a share, a nice premium over the $10 call options that were initially purchased. Whether that something is an upcoming acquisition or news on a successful (or unsuccessful) drug trial, it doesnt matter. Then, on April 4th, renowned Tesla (TSLA) CEO Elon Musk disclosed that he had acquired a 9.2% stake in the company. Volume alone is not enough to identify potential insider moves. This activity is particularly ripe for trade ideas. The Smart Money Saw it First. The breakeven for the trade is at. Instead, it is a way of trying to tilt the odds in our favor; a way of setting up a portfolio of trades with a goal of a positive return. There was a problem loading your book clubs. To trade unusual options activity, you have to get to the heart of what exactly makes a trade unusual. Full 30-day money back guarantee on annual subscriptions. It starts out with a bit of a sales pitch (expected) but then turns to a good education of what is known as the Greeks. Our Heat Seeker algorithm can make all the difference when trading unusual options activity. The ask represents the price at which someone is willing to openly sell the option. It is simply a measure of how many times a given security exchanged hands. We pioneered a formula for identifying unusual options activity. When we present a trade idea, we dont just regurgitate the trade that triggered the alert. Is it going to require an update to the VIX calculation? Insiders offer one easy explanation for the source of unusual options activity. , . Strike price: The price at which an option allows the holder to buy (calls) or sell (puts) the underlying stock is called the strike price. Najarian explained that this is a bearish bet because SQQQ is the short ETF and he thinks the trade might be a protection. When trying to add (or remove) a big position, these Wall Street firms will use all the tools available to them: listed exchanges, dark pool trading, and options markets. With the stock trading for roughly $38, these traders were betting on a BIG, outsized move to the upside in just a few monthsby purchasing short-dated call options more than $5 out-of-the-money. For any given expiration date, there can be any number of strike priceswhich are either in-the-money or out-of-the-money relative to the price at which the stock is trading. Traders were buying the November 91 calls in the name. A lot of game changing information. 2023 Market Rebellion, LLC. Youll learn nothing from me. On this page, we will give you the insiders guide to how you can identify, screen, and trade unusual options activityjust the way Jon Najarian, Pete Najarian, and a team of our Market Rebellion analysts do. Jon Najarian Leaves CNBC to Chart New Rebellious Horizons. FOLLOW YOUR MONEY INTO JOHN AND PETES' POCKETS!- A TRUE TITLE! One or two results are not indicative of the power of this strategy over the long term. 3) They Are On CNBC All The Time The reason the Najarian brothers have so much credibility is they appear on Fast Money on CNBC. Full content visible, double tap to read brief content. The Najarian brothers bring a unique perspective to trading that is built upon excellence in sports and education. All of this information is publicly available as reported when trades happen. It is a how to guide that shares . !The legend is coming to Making Money. Klicken Sie auf Alle ablehnen, wenn Sie nicht mchten, dass wir und unsere Partner Cookies und personenbezogene Daten fr diese zustzlichen Zwecke verwenden. This can be any combination of opening trades and closing trades. By clicking below, you also agree to our Terms of Use and acknowledge our Privacy Policy. But that was nothing compared to these call options, which gained 11-times their value immediately following the event. One of the best investment books out there, Reviewed in the United States on January 15, 2020. If the open interest is 100, that means thatacross the whole marketthere are 100 long contracts and 100 short contracts. In general, its traders or investors with a lot of resources and critically information that we dont have as individuals. Those do not exist. In order to get the most from UOA order flow, you have to commit to more than a few trades. Besides the fact that the volume is high, the fact that bearish sentiment dramatically exceeds open interest tells us without a doubt that the trade is an opening order. Were giving up the possibility of home run trades in exchange for what we hope are more doubles and triples. Market Rebellions reference to specific securities or Digital Assets should not be construed as a recommendation to buy, sell or hold that security or Digital Asset. Reviewed in the United States on June 6, 2020, Reviewed in the United States on April 1, 2021. A lot of game changing information. Wenn Sie Ihre Auswahl anpassen mchten, klicken Sie auf Datenschutzeinstellungen verwalten. Its more challenging than just viewing where big money flows are going. Market Rebellion has unusual options activity trading services designed for a wide range of experience levels. Why would someone seemingly throw away a large amount of money? These leveraged equity instruments give someone the right (but not the obligation) to buy or sell a security at a specific price on a specific date. For example, we like to see high volume relative to open interest.
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