, . For example, we like to see high volume relative to open interest. Those do not exist. 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. Unusual options activity is not a full-proof method to trading stocks. 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. Just like a polar bear walking on a beach. The dynamic duo are both chomping at the bit to join forces. Theyll be talking options trading as they break down the latest market action in the midst of a jam-packed week of earnings. Jon & Pete Najarian are the unusual options activity pioneers. Thats where experience and added research come into play. When we present a trade idea, we dont just regurgitate the trade that triggered the alert. 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. If that order appears paired with a stock transaction, for instance, it could be a hedging transaction. . For example, we like to see high options volume relative to open interest. The Smart Money Saw it First. https://t.co/vNCg4TDtQh. Pete Najarian spoke about high options activity in Taiwan Semiconductor Mfg. Lofty Expectations Meet Lofty Valuations at Teslas 2023 Investor Day. Pete Najarian has also bought these calls and he is going to hold them through the expiration. However, a more common unusual options activity trigger is not so obvious. And these are exactly the times (ahead of major market events) that they may be active. If there is about to be a phase 3 drug trial announcement, it wouldnt be unusual to see implied volatility very high. The Smart Money Saw it First. 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. Here's some things I think you should know about the Najarian brothers: Before we get into the backstory of these two I just want to make a comment about their marketing style. Revealed: The Smart Money Behind Techs Big Run. You know it when you see it. See Terms of Use for details. Surprisingly informative. 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, the idea of a trade being unusual options activity based on meeting one criteria (e.g., volume of the trade is greater than open interest) is too simple. 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. With the stock trading below $9, there was buying of at-the-money calls. Three Keys to Identifying UOA. 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. It has weathered the test of time and continues to perform as a reliable indication of where the Smart Money is investing. But the one method for finding trade ideas that has stood the test of time, in our experience, is unusual options activity. Lets take a look at a few recent examples. Top subscription boxes right to your door, 1996-2023, Amazon.com, Inc. or its affiliates, Learn more how customers reviews work on Amazon. And when news leaks, there are some greedy insiders who try to take advantage. However, options markets are still relatively small. Dont Make These Rookie Mistakes with UOA. 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. Taiwan Semiconductor Manufacturing Company Limited, UPDATE 1-China underlines key role of coal amid energy security drive, WRAPUP 1-China sets modest growth target of about 5% as parliament opens, UPDATE 1-Nations secure U.N. global high seas biodiversity pact, UPDATE 1-Another Norfolk Southern train derails in Ohio, railroad says no toxins aboard, China to guard against risks in property market - Premier Li. It's mostly biographies of these crooks. 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. Pete Najarian has also bought these. What would you like me to ask @jonnajarian on Wednesday? Check out Unusual Option Activity Pro. MILLIONS of options contracts are traded every day in the US. It's a comprehensive process that takes more than just tracking large options trades using a free scanner. He already owns the stock and he believes it has some upside potential, because it's lagging behind Wynn Resorts, Limited WYNN. As discussed above, the term we use for Smart Money could be company insiders trading on inside information or institutional firms building large positions. A company may release great news and have the stock price barely budge or even go down. When we first saw this unusual options activity in Activision (ATVI), the gaming giant was in a deep decline. 2019 Benzinga.com. (We discuss why this is in further detail in the Why do we trade unusual options activity section below.). You can check out the latest episode of the [emailprotected] below. , . Specific securities or Digital Assets are mentioned for educational and informational purposes only. To calculate the overall star rating and percentage breakdown by star, we dont use a simple average. Get a custom-designed trading program tailored to your individual needs, skill level, and schedule. Starting in 2021, our Heat Seeker algorithm spotted consistent activity in Tilray, one of the leading marijuana stocks. Brief content visible, double tap to read full content. I absolutely loved this book. Reviewed in the United States on May 20, 2020. Benzinga does not provide investment advice. 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. All of this information is publicly available as reported when trades happen. As small and nimble traders, we focus on capitalizing while these big funds are still amassing their market-moving position. Knowing what weve described about unusual options activity, the profile of the perfect trade is likely obvious. Heres an example from back in February 2021. We feel this agreement best positions Market Rebellion to expand our industry-leading content and provide even more insight to empower individual traders in the Rebel community. A lot of game changing information. All rights reserved. This book is totally worthless even if you only pay$9.95 for shipping and handling. FOLLOW THE SMART MONEY Unusual Option Activity JON & PETE NAJARIAN BOOK NEW. 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. This volume was far higher than the open interest meaning this position was a new opening trade. The orange dots indicate what we call unusual unusual options activity. The stock rose, and more and more unusual options activity appeared. Market Rebellion is not giving investment advice, tax advice, legal advice, or other professional advice. She is a popular actress, and was featured in the show Wall Street . Thats where experience and added research come into play. Pete Najarian noticed a big volume in the December $20 calls in JetBlue Airways Corporation JBLU. Jon Najarian, Pete's brother, was a trader who got Pete into trading. 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. When we present a trade idea, we dont just regurgitate the trade that triggered the alert. This doesnt mean that all of these trades are actionable. What are the filters that the options activity goes through before it is presented as a trade idea? Reviewed in the United States on June 6, 2020, Reviewed in the United States on April 1, 2021. There is fundamental research, technical analysis, and order flow analysis. Surprisingly informative. Someone is making a big bet (1,000,000 share equivalent) in the direction of the price. But that was nothing compared to these call options, which gained 11-times their value immediately following the event. Data rates may apply. The stock rose, and more and more unusual options activity appeared. Some sites have compiled free screeners that use a one-factor model to present unusual options activity. In order to get the most from UOA order flow, you have to commit to more than a few trades. There are many different ways to find trade ideas. Think youre ready to get started trading unusual options activity? After all, this is still a percentage game. Specifically, we will define what makes options activity unusual, tell you why we trade this strategy, how you can find and screen trade ideas, provide you with an overview of trade alerts, and then connect you with additional resources to learn more. Reviewed in the United States on June 6, 2020, Reviewed in the United States on April 1, 2021. That doesnt mean that if there was large call buying activity well out-of-the-money, it wouldnt flag as unusual. The Najarian brothers bring a unique perspective to trading that is built upon excellence in sports and education. Lets take a look at a few recent examples. Traders paid around 20 cents for them. He thinks they are honest and it's his fault, and no doubt he bears personal responsibility for making trades. The beauty of this strategy is that it doesnt really matter to us who the trader is or what the potential catalyst could be. All rights reserved. Try Unusual Option Activity Essential. This is a perfect example of how powerful unusual options activity can be. , , . . Ready to trade? Investors are fully responsible for any investment decisions they make. Pete Najarian spoke about Dropbox Inc (NASDAQ: DBX). If that order appears paired with a stock transaction, for instance, it could be a hedging transaction. Whether we're talking about thousand-dollar donations to food banks, tables-full of video game. Follow The Smart Money is an excellent book for those who are interested in learning about options, the stock market, and unusual options activity. Reviewed in the United States on March 12, 2021. Instead, our system considers things like how recent a review is and if the reviewer bought the item on Amazon. Unusual options activity is an order flow strategy. 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. Unusual options activity is how we Follow the Smart Money in our trades. Try again. One example, we frequently buy higher delta calls or puts than the triggering trade (or may even put them on as a vertical spread instead of an outright call/put purchase). Tune in and get fresh stock market insights from Jon and watch him unveil the latest in Unusual Options Activity. As always, thanks for being part of this growing Rebellion of traders. It is written in easy to understand language and filled with real life examples and spot-on analogies. Youll learn nothing from me. See Also: Todd Gordon's Starbucks Options Trade. 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. If there is about to be a phase 3 drug trial announcement, it wouldnt be unusual to see implied volatility very high. As an options trader, you have many different options for finding trade ideas. Pete Najarian spoke about high options activity in Taiwan Semiconductor Mfg. Sorry, there was a problem loading this page. This is the date by which an option either has to be exercised or the contract is void. Najarian explained that this is a bearish bet because SQQQ is the short ETF and he thinks the trade might be a protection. You can watch the latest episode of the [emailprotected] below. Najarian options activity on CNBC halftime report don't reflect strategy presented in this book. The orange dots indicate what we call unusual unusual options activity. Last week, Market Rebellion identified thousands of bearish puts bought in Silvergate Capital. Insiders offer one easy explanation for the source of unusual options activity. 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. 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. Today, shares were cut in half. Investors are fully responsible for any investment decisions they make. Whether that something is an upcoming acquisition or news on a successful (or unsuccessful) drug trial, it doesnt matter. The options he does DD on and trades almost always do well. . I highly recommend it. But, unusual options activity isnt a magic bullet. Specific securities or Digital Assets are mentioned for educational and informational purposes only. , ISBN-13 Then, well reveal why we use this trading strategy and how you too can find and screen trade ideas. But, you should also realize that this is still a probability-based analysis. SEIZE CONTROL OF YOUR FINANCIAL DESTINY - Get a custom-designed educational package tailored to your individual trading needs, skill level, and schedule. Target Option Traders Turn Bearish Following Big Holiday Shopping Weekend, Do Not Sell My Personal Data/Privacy Policy. In other words, the trade clearly doesnt make sense. Insiders Guide: How to Trade Unusual Options Activity. Free shipping. Starting in March 2022, we began identifying unusual call buying in social media giant Twitter (TWTR). This doesnt mean that all of these trades are actionable. 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. Benzinga does not provide investment advice. That doesnt mean to say that if there was large call buying activity well out-of-the-money, it wouldnt flag as unusual. Not only did they nail the bottom in this high-volatility name they got in just weeks before Microsoft (MSFT) would announce that they were planning to acquire ATVI for $95 per share. Those do not exist. He loves the trade and he decided to follow it. We are sorry. The market may be expecting a large move. Open interest: Open interest is the amount of contracts outstanding in the market. Dont miss Making Money With Charles Payne, today on Fox Business! By clicking below, you also agree to our Terms of Use and acknowledge our Privacy Policy. On the opposite side, it doesnt mean that a large trade executed on the offer with a close expiration date is unusual. Almost 30,000 contracts were traded in the first half of the session. The trade breaks even at $49.80 or 1.78% above the closing price on Thursday. Our Heat Seeker algorithm can make all the difference when trading unusual options activity. If youre looking to trade UOA, you came to the right place. Rebels Edge 01-09-23. So, you may ask, why do we want to follow Smart Money?. 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. The Najarian brothers track the options market closely -- in this clip they reveal the unusual buying activity they're seeing. Watch and see how we follow the Smart Money with Unusual Option Activity. The expiration is covering the J.P. Morgan Healthcare Conference. 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.Investors are fully responsible for any investment decisions they make. Najarian Brothers See Unusual Options Activity In Bristol-Myers, AMD And More . Eventually, Pete became the President of Mercury Trading. More than 10,000 contracts of the October $15 calls were traded for 20 cents in the first half of the session. For example, popular ones look at the ratio of volume to open interest in a particular option. Theres nothing wrong with that; its just not unusual options activity. Starting in November 2020, we noticed that Gluu Mobile Inc. (GLUU) was starting to heat up. Unable to add item to List. Volume: Volume is the number of trades over a given time period. However, most unusual options activity alerts dont neatly check all of the boxes on the above list. In the options market, thats a trade that stands out so much you cant help but notice it; a trade or, more frequently, a series of trades with essentially no reasonable explanation other than someone must know the stock price is going in one direction or the other. 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. 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. 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. Instead, understand the process by which trade ideas are chosen from the potential unusual options activity. The ask represents the price at which someone is willing to openly sell the option. And were already hitting the ground running! In Follow the Smart Money, Jon and Pete will teach youstep-by-stephow they trade unusual option activity every day. Najarian Brothers See Unusual Option Activity in $MGM, $DBX, $LVS & $ASHR Read more:. Please try again. This can be any combination of opening trades and closing trades. This article was last updated on 11/30/2022. One of the best investment books out there, Reviewed in the United States on January 15, 2020. Traders were buying the January $48 calls. That means someone is making an unusually big bet (1,000,000 share equivalent) in the direction of the price. By looking at options activity, we can see the footprints of how theyre moving before the rest of the market does. Everyone is looking for an edge in the market. He followed the trade and he is going to hold . One example, we frequently buy higher delta calls or puts than the triggering trade (or may even put them on as a vertical spread instead of an outright call/put purchase). Pete Najarian noticed high options activity in Quanta Services Inc (NYSE: PWR ). Lets say that we see 10,000 calls are purchased versus open interest of 250 contracts. To trade unusual options activity, you have to get to the heart of what exactly makes a trade unusual.