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. This is not a waste of time. Everyone is looking for an edge in the market. Heres an example from February 2021. All of this information is publicly available as reported when trades happen. The market can (and will) do what the market wants. I absolutely loved this book. In other words, the trade clearly doesnt make sense. 01:12 Wed, Dec 28 2016 2:36 PM EST Then, on April 4th, renowned Tesla (TSLA) CEO Elon Musk disclosed that he had acquired a 9.2% stake in the company. One of the best investment books out there, Reviewed in the United States on January 15, 2020. Traders were buying the November $49 calls in the name. Market Rebellion Review - Najarian Brothers Scam? Find out more about how we use your personal data in our privacy policy and cookie policy. He followed the trade and he is going to hold . 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). Remember, were looking for activity that Smart Money traders are making. Finally, well give you a sneak peek at our unusual options activity trade alerts and connect you with additional resources to learn more. Learn more how customers reviews work on Amazon. By clicking below, you also agree to our Terms of Use and acknowledge our Privacy Policy. Why would someone seemingly throw away a large amount of money? With the stock trading below $9, there was buying of at-the-money calls. 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. 2023 Benzinga.com. It just means that they passed the first level test. 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. 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. It is simply a measure of how many times a given security exchanged hands. I especially enjoyed the chapter on The Greeks, which I thought was a thorough and clear explanation, and the relatable comparison of a call option to a rain-check. Brief content visible, double tap to read full content. Traders were buying the November $49 calls in the name. If you do not want us and our partners to use cookies and personal data for these additional purposes, click 'Reject all'. Want unusual option activity trade ideas delivered to you every day? 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). If you are someone who doesnt learn easily , doesnt commit, or are lazy, dont kid yourself, dont buy. However, most unusual options activity alerts dont neatly check all of the boxes on the above list. Almost 16,000 contracts . Follow The Smart Money - Unusual Option Activity - #1 Way We Choos - VERY GOOD. Unable to add item to List. Najarian Brothers Highlight Unusual Options Activity In - Benzinga He jumped in the trade and he is planning to hold the position for a month. I'm so pumped!!!! Najarian jumped in the trade and he is going to . One or two results are not indicative of the power of this strategy over the long term. Get a daily dose of unusual options activity. Their goal is to be inconspicuous. All Rights Reserved. When we present a trade idea, we dont just regurgitate the trade that triggered the alert. All rights reserved. By clicking below, you also agree to our Terms of Use and acknowledge our Privacy Policy. Pete Najarian noticed a big volume in the December $20 calls in JetBlue Airways Corporation JBLU. First, well define what makes options activity unusual. And that is information that we act on. Jon Najarian has also noticed a purchase of the November $22 calls in Builders FirstSource, Inc. (NASDAQ: BLDR). But that was nothing compared to these call options, which gained 11-times their value immediately following the event. Your recently viewed items and featured recommendations. Kick back with Jon & Pete LIVE, every Monday, Tuesday, Wednesday & Thursday as they talk and debate Market Ticks, Unusual Option Activity Picks, and Sports Blitz. True, that is a necessary condition of unusual options activity, but its not sufficient to trade off of the order flow. If youre looking to trade UOA, you came to the right place. Starting in 2021, our Heat Seeker algorithm spotted consistent activity in Tilray, one of the leading marijuana stocks. He loves the trade and he decided to follow it. Pete Najarian noticed high options activity in Quanta Services Inc (NYSE: PWR ). By looking at options activity, we can see the footprints of how the Smart Money (institutional investors, hedge funds, and potentially even insider traders) are moving before the rest of the market does. Dont be stupid though. 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. Benzinga does not provide investment advice. Instead, our system considers things like how recent a review is and if the reviewer bought the item on Amazon. Its a comprehensive process that takes more than just tracking large options trades using a free scanner. Pete Najarian spoke about Dropbox Inc (NASDAQ: DBX). Remember, Smart Money traders could be company insiders trading on inside information or institutional traders building large positions. Around 4,000 contracts of the January $43 calls were traded for about $1.10. Instead, they got a model of a tarp,, 8 Times Retail Traders Did Something Amazing. The Najarian brothers bring a unique perspective to trading that is built upon excellence in sports and education. Follow The Smart Money is an excellent book for those who are interested in learning about options, the stock market, and unusual options activity. Think youre ready to get started trading unusual options activity? Why would someone seemingly throw away a large amount of money? 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. Last week, Market Rebellion identified thousands of bearish puts bought in Silvergate Capital. Najarian Brothers Highlight Unusual Options Activity In Activision Almost 30,000 contracts were traded in the first half of the session. And these are exactly the times (ahead of major market events) that they may be active. 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. The breakeven for the trade is at. This is a perfect example of how powerful unusual options activity can be. Sorry, there was a problem loading this page. If there is about to be a phase 3 drug trial announcement, it wouldnt be unusual to see implied volatility very high. Pete Najarian has also bought these. Follow The Smart Money is an excellent book for those who are interested in learning about options, the stock market, and unusual options activity. Find out how they put the odds of success more in their favor by: How Rebels Trade Unusual Options Activity. You can watch the latest episode of the [emailprotected] below. Full content visible, double tap to read brief content. 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). As an options trader, you have many different options for finding trade ideas. 3 talking about this. This strategy has survived the death of the trading floor and migration to electronic trading, the rise of high-frequency trading, the popularity of ETFs and passive investing, and every other major change for the past three decades. The expiration is covering the J.P. Morgan Healthcare Conference. 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. Market Rebellion is not giving investment advice, tax advice, legal advice, or other professional advice. These nuances, like determining the difference between a hedge and an outright directional bet, are why those free, single-factor scanners pale in comparison to the Heat Seeker algorithm and Market Rebellions team of options experts. Full 30-day money back guarantee on annual subscriptions. It was worth the price. Read instantly on your browser with Kindle for Web. 2023 Market Rebellion, LLC. When we first saw this unusual options activity in Activision (ATVI), the gaming giant was in a deep decline. Howd that play out? 2023 Benzinga.com. Were giving up the possibility of home run trades in exchange for what we hope are more doubles and triples. These positions ultimately move stock prices in big ways, but the cause and effect may not be immediate. The beauty of this strategy is that it doesnt really matter to us who the trader is or what the potential catalyst could be. In simple terms, you are looking for a trade that makes you say hmmm thats weird. 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. In your trading, you are going to have to work to identify how much of this criteria must be met to make a trade unusual to you. Lets say that we see 10,000 put options are purchased versus open interest of 250 contracts. Reviewed in the United States on May 20, 2020. You can change your choices at any time by clicking on the 'Privacy dashboard' links on our sites and apps. In the options market, thats a trade that stands out so much you cant help but notice it; a tradeor, more frequently, series of tradeswith essentially no explanation other than someone must know the stock price is going in one direction or the other. From identifying the trade, to confirming if its unusual, to choosing the right options strategy, youll learn how to do it the way they do it. 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. 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. And to do that, they have to try to mask their activity. BTW - I dont think there is an easy way to learn the Greeks. Catch Jon Najarian on Fox Business with Charles Payne: November 30th, at 2pm EDT, and then once again in studio on December 7th. Lets take a look at a few recent examples. 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. Access daily UOA with trade ideas filtered by our pro analysts former market makers Ryan Mastro & Wayne Razzi. : Knowing what weve described about unusual options activity, the profile of the perfect trade is likely obvious. (We discuss why this is in further detail in the Why do we trade unusual options activity section below.). Jon Najarian saw unusual activity in Aimmune Therapeutics Inc AIMT.When the stock was trading at $25, options traders began buying the December $30 calls. Starting in November 2020, we started flagging buying in GLUU, with activity in March and June. 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. FOLLOW THE SMART MONEY Unusual Option Activity JON & PETE NAJARIAN BOOK NEW. Follow the Smart Money Review: Unusual Options Activity : Thats where experience and added research come into play. The Najarian brothers bring a unique perspective to trading that is built upon excellence in sports and education. Whether we're talking about thousand-dollar donations to food banks, tables-full of video game. Starting in November 2020, we noticed that Gluu Mobile Inc. (GLUU) was starting to heat up. Is there a methodology to controlling risk in the trade? Amazon has encountered an error. However, options markets are still relatively small. It looks at where options (calls or puts) are being bought, primarily compared against historic or normal levels. And that is information that we act on. Co. Ltd. (NYSE: TSM). Specific securities or Digital Assets are mentioned for educational and informational purposes only. Customer Reviews, including Product Star Ratings help customers to learn more about the product and decide whether it is the right product for them. This doesnt mean that all of these trades are actionable. He also covers . Reviewed in the United States on May 4, 2021. Do Not Sell My Personal Data/Privacy Policy. The dynamic duo are both chomping at the bit to join forces. Jon Najarian noticed that options traders were buying the December $32 calls in Luckin Coffee Inc - ADR (NASDAQ: LK ). However, a more common unusual options activity trigger is not so obvious. By April 14th, Musk stunned everyone by making an offer to buy the remaining shares of TWTR at $54.20 apiece. You're listening to a sample of the Audible audio edition. You know it when you see it. They picked the $15.50 strike, although the price has already jumped above that level. All Rights Reserved. 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. In general, its traders or investors with a lot of resources and critically information that we dont have as individuals. Around 3,000 contracts of the October $19.50 calls in Under Armour Inc Class A (NYSE: UAA) were traded in the first half on Wednesday. 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. Today, shares were cut in half. Thats where experience and added research come into play. Whats that mean in practice? Tesla investors were hoping for announcements about the highly anticipated Model 2. : 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. Over 10,000 contracts were traded in the first half of the session and Najarian followed the trade. In other words, the trade example above depicts volume, volatility, and velocity three of Jon & Petes favorite metrics for deciphering the complex moves of the market. Dont Make These Rookie Mistakes with UOA. All rights reserved. Learn more. Every time he tells me about Pete and John's unusual call option activity it ALWAYS ranks. 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. However, unusual options activity isnt a magic bullet. Najarian Brothers See Unusual Option - Najarian Brothers | Facebook Surprisingly informative. On CNBC's "Fast Money Halftime Report," Jon Najarian said he saw unusually high options activity in the Nov. $39 calls in iShares FTSE/Xinhua China 25 Index (NYSE: FXI ). True, that is a necessary condition of unusual options activity, but it is not sufficient to trade off of the order flow. 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. Well keep you informed about all the additional, exciting developments on the horizon as updates emerge. She is a popular actress, and was featured in the show Wall Street . , ISBN-13 Our Free Book Helps Everyday Investors Follow the Smart Money! | Here's Investors are fully responsible for any investment decisions they make. We think about how the trade will perform as the price of the stock moves and time decay sets in. 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. While there is a formula, it is not exactly straightforward. Tell us a little bit more about yourself and we can help you come up with a personalized trading plan to connect you with the options education or trade ideas that will help you reach your trading goals. At Market Rebellion, our unusual options activity trades are all centered around the idea of controlling risk, with a firm understanding of the fundamentals and mechanics of options trading. Lets take a look at a few recent examples. Najarian Brothers Highlight Unusual Options Activity In L Brands 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. Were giving up the possibility of home run trades in exchange for what we hope are more doubles and triples. At Market Rebellion, our unusual options activity trades are all centered around the idea of controlling risk, with a firm understanding in the fundamentals and mechanics of options trading. In Follow the Smart Money, Jon and Pete will teach youstep-by-stephow they trade unusual option activity every day. But it didnt take nearly as long for those call options to skyrocket. Unusual options activity is an order flow strategy. There are a number of ways that a trade can be unusual: option trading volume, open interest, the date of expiration, the strike price, and the price paid. The stock rose, and more and more unusual options activity appeared. But, you should also realize that this is still a probability-based analysis. 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. Around 2,500 contracts of the April $18 calls were traded in Nuance Communications Inc. NUAN for $1.15. Lets say that we see 10,000 calls are purchased versus open interest of 250 contracts. The orange dots indicate what we call unusual unusual options activity. It looks at where options (calls or puts) are being bought, primarily compared against historic or normal levels. Follow The Smart Money - Unusual Option Activity - #1 Way We Choose Our The market is too big and too humbling for us to expect that. He explained that traders were buying the November 24 calls Monday. Reviewed in the United States on October 19, 2020. The very next day it was announced that Zendesk was getting bought out for $77.50 per share making the $70-strike call options bought the day prior conspicuously well timed and well targeted. Theyll be talking options trading as they break down the latest market action in the midst of a jam-packed week of earnings. It is written in easy to understand language and filled with real life examples and spot-on analogies. Click here for our 3 keys to identifying potential unusual options activity in any market. Instead, understand the process by which trade ideas are chosen from the potential unusual options activity. Pete and Jon are the sons of famous surgeon John Najarian . The stock had fallen more than 25% in just six weeks prior to this purchase but this big buyer of 6,000 out-of-the-money February calls (bought as part of a spread) wasnt deterred. Price paid: The price paid is how much the option buyer paid for the option. But, you should also realize that this is still a probability-based analysis. Jon Najarian Leaves CNBC to Chart New Rebellious Horizons.