On June 23rd, 2022, a trader picked up 2,300 far out-of-the-money $70-strike call options in Zendesk (ZEN) expiring in less than a month. And these are exactly the times that they may be active. 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. You may find other books as helpful and maybe more so but this is a good introduction. By clicking Get Access, you agree to receive marketing offers from Market Rebellion, and its affiliates, subsidiaries, or agents in the form of emails, pre-recorded messages, text messages, and autodialed calls at the email address and phone number provided above, even if the phone number is present on a state or national Do Not Call list. I highly recommend it. Try again. This book is totally worthless even if you only pay$9.95 for shipping and handling. Whether that something is an upcoming acquisition or news on a successful (or unsuccessful) drug trial, it doesnt matter. All Rights Reserved. We think about how the trade will perform as the price of the stock moves and time decay sets in. Its really in how these multiple factors come together as one that makes a trade truly unusual. All that matters is that they might know something we dont know and that something is expected to move the price of the stockin a big way. SEIZE CONTROL OF YOUR FINANCIAL DESTINY - Get a custom-designed educational package tailored to your individual trading needs, skill level, and schedule. Finally, well give you a sneak peek at our unusual options activity trade alerts and connect you with additional resources to learn more. 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. A lot of game changing information. Investors are fully responsible for any investment decisions they make. Silvergate Capital Just Got Cut in Half. By clicking Get Access, you agree to receive marketing offers from Market Rebellion, and its affiliates, subsidiaries, or agents in the form of emails, pre-recorded messages, text messages, and autodialed calls at the email address and phone number provided above, even if the phone number is present on a state or national Do Not Call list. Shares of ZEN shot up 50% on the news, and these options contracts (originally bought for between $0.70 and $0.75) would go on to trade as high as $5.80 per contract. It doesnt mean that the price of the stock will move. First, well define what makes options activity unusual. 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. 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. Unusual options activity is an order flow strategy. You could use this to actually learn to trade using the Greeks but it wont be a walk in the park it will take you much concerted effort, like being in school, but it is all there. Get real-time UOA trading insights and LIVE-market analysis throughout each trading day as part of our community of elite traders. It is written in easy to understand language and filled with real life examples and spot-on analogies. Explore each tier of Market Rebellions unusual options activity memberships: Get up to speed on how to get an early jump on big Smart Money market moves. At the time, Twitters share price had been cut in half from its $80 all-time high reached in February of 2021. Jon and Pete Najarian pioneered Unusual Options Activity trading strategies to follow the smart money. Its more challenging than just viewing where big money flows are going. Volume alone is not enough to identify potential insider moves. Some sites have compiled free screeners that use a one-factor model to present unusual options activity. As individual traders, we focus on capitalizing while these big funds are still amassing their market-moving position. Around 5,000 contracts of the December $49 calls in Metlife Inc (NYSE: MET) were traded for 80 cents. 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). The ask represents the price at which someone is willing to openly sell the option. This is the date by which an option either has to be exercised or the contract is void. Heres an example from back in February 2021. It was worth the price. Follow The Smart Money is an excellent book for those who are interested in learning about options, the stock market, and unusual options activity. Youll learn nothing from me. 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. Follow The Smart Money - Unusual Option Activity - #1 Way We Choos - VERY GOOD. So, you may ask, why do we want to follow Smart Money?. , . Not sure where to start? When the stock was trading at $25, options traders began buying the December $30 calls. : The market is too big and too humbling for us to expect that. True, that is a necessary condition of unusual options activity, but its not sufficient to trade off of the order flow. Reviewed in the United States on March 12, 2021. Heres a glimpse at Market Rebellions unique approach to trading the UOA strategy: Our Unusual Options Activity Philosophy Explained. Lofty Expectations Meet Lofty Valuations at Teslas 2023 Investor Day. Target Option Traders Turn Bearish Following Big Holiday Shopping Weekend, Do Not Sell My Personal Data/Privacy Policy. On the opposite side, it doesnt mean that a large trade executed on the offer with a close expiration date is unusual. For example, around some major news events, the implied volatility measure may prove less important. Surprisingly informative. Sorry, there was a problem loading this page. The dirty secret on Wall Street is that often news leaks, of earnings reports, upgrades or downgrades, drug trials, or other major, market-moving news, in advance of the news becoming public. Market Rebellion is not giving investment advice, tax advice, legal advice, or other professional advice. The beauty of this strategy is that it doesnt really matter to us who the trader is or what the potential catalyst could be. Sanofi SA SNY was also active. The Narajian brothers have capture their experiences identifying option trade opportunities and execute them. 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. BTW - I dont think there is an easy way to learn the Greeks. authenticate users, apply security measures, and prevent spam and abuse, and, display personalised ads and content based on interest profiles, measure the effectiveness of personalised ads and content, and, develop and improve our products and services. Full content visible, double tap to read brief content. Surprisingly informative. Is there a methodology to controlling risk in the trade? 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. All Rights Reserved. It was worth the price. Your recently viewed items and featured recommendations. Najarian followed the trade and he is going to hold the position until the December expiration. Watch and see how we follow the Smart Money with Unusual Option Activity. Sie knnen Ihre Einstellungen jederzeit ndern, indem Sie auf unseren Websites und Apps auf den Link Datenschutz-Dashboard klicken. Why would someone seemingly throw away a large amount of money? It is simply a measure of how many times a given security exchanged hands. There is fundamental research, technical analysis, and order flow analysis. On the opposite side, it doesnt mean that a large trade executed on the offer with a close expiration date is unusual. Each day, Jon Najarian gives three UOA trade ideas live in [emailprotected] with Jon Najarian. Like stocks, options have two prices: a bid and an ask. Lets take a look at a few recent examples. Please try again. Never miss our contentlet us deliver it right to your inbox. 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. This is not a waste of time. One of the best investment books out there, Reviewed in the United States on January 15, 2020. 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). Jon and Pete Najarian are well known traders to CNBC viewers, and their Fast Money Halftime segment on 'unusual options activity' is the highest rated segment of the day on CNBC. If the open interest is 100, that means thatacross the whole marketthere are 100 long contracts and 100 short contracts. After all, this is still a percentage game. Remember, Smart Money traders could be company insiders trading on inside information or institutional traders building large positions. See Also: Todd Gordon's Starbucks Options Trade. You can watch the latest episode of the [emailprotected] below. 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. Theres nothing wrong with that; its just not unusual options activity. Just like a polar bear walking on a beach. That means if youre planning on trading unusual options activity, you need to make sure youre looking at the whole picture by applying additional filters. Unable to add item to List. Access daily UOA with trade ideas filtered by our pro analysts former market makers Ryan Mastro & Wayne Razzi. Instead, understand the process by which trade ideas are chosen from the potential unusual options activity. For example, we like to see high volume relative to open interest. 'Fast Money Halftime Report' Traders Weigh In On Lowe's, Micron And More, 'Fast Money Halftime Report' Picks For October 9. When Wall Street moves into (or out of) a company, sector, or theme, the smaller options market is often the first place its noticeable. On CNBC's "Fast Money Halftime Report," Pete Najarian said options traders were buying the Sept. $9 calls in Bed Bath & Beyond Inc. (NASDAQ: BBBY). Pete Najarian has also bought these calls and he is going to hold them through the expiration. 2023 Market Rebellion, LLC. This article was last updated on 11/30/2022. Whilst the Najarian brothers did create a reliable algorithm that detects changes in trading volume, but they and Cramer are just hired to hype up the market or redirecting attentions away from some industries 3 More posts you may like Join 22 days ago Its a comprehensive process that takes more than just tracking large options trades using a free scanner. However, options markets are still relatively small. In Follow the Smart Money, Jon and Pete will teach youstep-by-stephow they trade unusual option activity every day. The Najarian brothers recently started airing ads touting their new book and DVD called 'Follow the Smart Money'. Tune in at 3pm ET as Jon highlights three stocks the smart money could be buying or selling via UOA, each day before the closing bell. Pete Najarian noticed a big volume in the December $20 calls in JetBlue Airways Corporation JBLU . But, you should also realize that this is still a probability-based analysis. The bid represents the price at which someone is willing to openly buy the option. Now, imagine that those 10,000 put options were bought far out-of-the-money. Instead, our system considers things like how recent a review is and if the reviewer bought the item on Amazon. And were already hitting the ground running! It is written in easy to understand language and filled with real life examples and spot-on analogies. All of this information is publicly available as reported when trades happen. 2019 Benzinga.com. Reviewed in the United States on October 26, 2020. The breakeven for the trade is at. Please try again. Whether this trade in ZEN was made by an insider who knew about the acquisition ahead of its press release, or by an institutional trader with access to powerful research tools that we as individual retail traders cant use, the point is the same: monitoring unusual options activity is the only way to get inside the minds (and wallets) of the Wall Street elite. Traders paid around 20 cents for them. 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. Najarian Brothers See Unusual Option Activity in $MGM, $DBX, $LVS & $ASHR Read more:. If a trade is a large notional dollar amount, traded on the offer, with high options volume that exceeds open interest, well out-of-the-money, and a small likelihood of the price naturally reaching there as it relates to implied volatility, then that trade is certainly unusual. Top subscription boxes right to your door, 1996-2023, Amazon.com, Inc. or its affiliates, Learn more how customers reviews work on Amazon. See Also: Target Option Traders Turn Bearish Following Big Holiday Shopping Weekend. , , . . Starting in November 2020, we noticed that Gluu Mobile Inc. (GLUU) was starting to heat up. 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. Price paid: The price paid is how much the option buyer paid for the option. Options are leveraged instruments that give equity traders the right (but not the obligation) to buy or sell a stock at a specific price on a specific date. In the meantime, be sure to follow Jons regularly scheduled, Rebellion-exclusive shows inside the Rebel Hub. I absolutely loved this book. In order to get the most from UOA order flow, you have to commit to more than a few trades. And that is information that we act on. , Reviewed in the United States on October 26, 2020. Is it going to require an update to the VIX calculation? The options he does DD on and trades almost always do well. Jon Najarian noticed that options traders were buying the December $32 calls in Luckin Coffee Inc - ADR (NASDAQ: LK ). Traders were buying the November $49 calls in the name. Reviewed in the United States on May 4, 2021. Revealed: The Smart Money Behind Techs Big Run. . With the stock trading below $9, there was buying of at-the-money calls. Thats an exchange we are happy to make. This article was last updated on 12/14/2022. https://t.co/vNCg4TDtQh. It tells you almost nothing about investing and and gives them a chance to BOMBARD your Email inbox with get rich quick(FOR JOHN AND PETE)) offers. Built for fast-paced traders. This volume was far higher than the open interest meaning this position was a new opening trade. If you are someone who doesnt learn easily , doesnt commit, or are lazy, dont kid yourself, dont buy. The dirty secret on Wall Street is that often news leaks, of an earnings report, upgrades or downgrades, drug trials, or other major, market-moving news, in advance of the news becoming public. By clicking below, you also agree to our Terms of Use and acknowledge our Privacy Policy. Dont be stupid though. Lets say that we see 10,000 put options are purchased versus open interest of 250 contracts. Theres fundamental research, technical analysis, and order flow analysis. The market may be expecting a large move. Whether that something is an upcoming acquisition or news on a successful (or unsuccessful) drug trial, it doesnt matter. On February 8, it was announced that Electronic Arts was buying GLUU for $12.50 a share, a nice premium over the $10 calls that were initially purchased. Howd that play out? All rights reserved. Last week, Market Rebellion identified thousands of bearish puts bought in Silvergate Capital. Data rates may apply. And to do that, they have to try to mask their activity. 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. 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. Its more challenging than just viewing where big money flows are going. 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. There are a number of ways that a trade can be unusual: volume, open interest, the date of expiration, the strike price, and the price paid. Almost 30,000 contracts were traded in the first half of the session. Were giving up the possibility of home run trades in exchange for what we hope are more doubles and triples. Customer Reviews, including Product Star Ratings help customers to learn more about the product and decide whether it is the right product for them.Learn more how customers reviews work on Amazon. Every time he tells me about Pete and John's unusual call option activity it ALWAYS ranks. Starting in November 2020, we started flagging buying in GLUU, with activity in March and June. He also noticed that traders are buying the November 35.50 calls in Pfizer Inc. PFE. Everyone is looking for an edge in the market. The Najarian brothers track the options market closely -- in this clip they reveal the unusual buying activity they're seeing. Knowing what weve described about unusual options activity, the profile of the perfect trade is likely obvious. Traders were buying the January $48 calls. , Paradigm Direct LLC; Standard Edition (January 1, 2018), ISBN-10 Remember, were looking for activity that Smart Money traders are making. Learn more. Specific securities or Digital Assets are mentioned for educational and informational purposes only. 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. As always, thanks for being part of this growing Rebellion of traders. 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 2023 Market Rebellion, LLC. Its really in how these multiple factors come together that qualifies an options trade as truly unusual. Rebels Edge 01-09-23. If a trade is a large notional dollar amount, traded on the offer, with high volume that exceeds open interest, well out-of-the-money, and a small likelihood of the price naturally reaching there as it relates to implied volatility, then that trade is certainly unusual. The orange dots indicate what we call unusual unusual options activity. And that is information that we act on. Data rates may apply. During decades of trading this activity, Jon and Pete Najarian have honed their strategy, automating much of what they learned into a proprietary Heat Seeker algorithm that scans the order flow at all of the options exchanges. 2023 Benzinga.com. Pete Najarian spoke about high options activity in Taiwan Semiconductor Mfg. Get a custom-designed trading program tailored to your individual needs, skill level, and schedule. But the one method for finding trade ideas that has stood the test of time, in our experience, is unusual options activity. Become an Unusual Options Activity trading master with 10+ new trade ideas and updates per week. In other words, the trade clearly doesnt make sense. All investments involve risk, and the past performance of a security, Digital Asset, industry, sector, market, financial product, trading strategy, or individuals trading does not guarantee future results or returns. Explore unusual options activity memberships from Market Rebellions best in the business trades: 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). See Terms of Use for details. Open interest: Open interest is the amount of contracts outstanding in the market. It just means that they passed the first level test. With the stock trading below $9, there was buying of at-the-money calls. When done properly and viewed in the context of a complete portfolio, however, it can be a powerful tool for your portfolio. Benzinga does not provide investment advice. And these are exactly the times (ahead of major market events) that they may be active. $4.39. Expiration date: All options have expiration dates. He explained that traders were buying the November 24 calls Monday. Then, on April 4th, renowned Tesla (TSLA) CEO Elon Musk disclosed that he had acquired a 9.2% stake in the company. The market may be expecting a large move. 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. But when done properly, it can be a powerful tool for your portfolio. Starting in 2021, our Heat Seeker algorithm spotted consistent activity in Tilray (TLRY), one of the leading marijuana stocks.