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. Today, shares were cut in half. The expiration is covering the J.P. Morgan Healthcare Conference. Unusual options activity is not a full-proof method for trading stocks. Think youre ready to get started trading unusual options activity? That announcement caused shares of Activision to soar by 26%. Read instantly on your browser with Kindle for Web. Jon Najarian saw unusual activity in Aimmune Therapeutics Inc (NASDAQ: AIMT ). However, a more common unusual options activity trigger is not so obvious. The Najarian brothers bring a unique perspective to trading that is built upon excellence in sports and education. Najarian options activity on CNBC halftime report don't reflect strategy presented in this book. Access daily UOA with trade ideas filtered by our pro analysts former market makers Ryan Mastro & Wayne Razzi. Ultimately, the stock kept surging from the $9 price point to above $60, before its price eventually fell back to earth. Now, imagine that those 10,000 put options were bought far out-of-the-money. Remember, were looking for activity that Smart Money traders are making. One or two results are not indicative of the power of this strategy over the long term. Unusual options activity is an order flow strategy. 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. Around 2,500 contracts of the April $18 calls were traded in Nuance Communications Inc. NUAN for $1.15. 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. A lot of game changing information. Howd that play out? Surprisingly informative. Pete Najarian noticed a big volume in the December $20 calls in JetBlue Airways Corporation JBLU . The Najarian brothers track the options market closely -- in this clip they reveal the unusual buying activity they're seeing. , ISBN-13 All Rights Reserved. After viewing product detail pages, look here to find an easy way to navigate back to pages you are interested in. This activity is particularly ripe for trade ideas. Jon Najarian has reached a mutual agreement with CNBC to discontinue his exclusive contributor contract here's where you can watch him now. Pete Najarian has also bought these calls and he is going to hold them through the expiration. The book is an easy read with basic concepts but there are many better books available. There is fundamental research, technical analysis, and order flow analysis. 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. If you are interested in unusual options activity because of exponential gains from front-running potential news, thats normal. The market is too big and too humbling for us to expect that. Can is the operative word. If you are ready to get started trading unusual options activity, What Information to Look For in Trade Alerts, Dont Make These Rookie Mistakes with UOA, Revealed: The Smart Money Behind Techs Big Run. 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. While there is a formula, it is not exactly straightforward. These positions ultimately move stock prices in big ways, but the cause and effect may not be immediate. And that is information that we act on. So, you may ask, why do we want to follow Smart Money?. For example, around some major news events, the implied volatility measure may prove less important. 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. But it didnt take nearly as long for those call options to skyrocket. 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. 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 that order appears paired with a stock transaction, for instance, it could be a hedging transaction. Lets say that we see 10,000 put options are purchased versus open interest of 250 contracts. Built for fast-paced traders. 4 people found this helpful Helpful Report abuse S1Guy Better than expected Reviewed in the United States on May 20, 2020 Their goal is to be inconspicuous. The Najarian brothers recently started airing ads touting their new book and DVD called 'Follow the Smart Money'. 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. , Yahoo, Yahoo. The options he does DD on and trades almost always do well. True, that is a necessary condition of unusual options activity, but it is not sufficient to trade off of the order flow. Benzinga does not provide investment advice. By looking at options activity, we can see the footprints of how theyre moving before the rest of the market does. Jon Najarian, Pete's brother, was a trader who got Pete into trading. Everyone is looking for an edge in the market. That means someone is making an unusually big bet (1,000,000 share equivalent) in the direction of the price. That doesnt mean that if there was large call buying activity well out-of-the-money, it wouldnt flag as unusual. . If you would like to customise your choices, click 'Manage privacy settings'. Reviewed in the United States on October 26, 2020. Unusual options activity is how we Follow the Smart Money in our trades. However, unusual options activity isnt a magic bullet. We think about how the trade will perform as the price of the stock moves and time decay sets in. We think about how the trade will perform as the price of the stock moves and time decay sets in. Jon Najarian Leaves CNBC to Chart New Rebellious Horizons. Dont be stupid though. What would you like me to ask @jonnajarian on Wednesday? Find this article helpful? The market is too big and too humbling for us to expect that. Volume: Volume is the number of trades over a given time period. 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. Pete and Jon are the sons of famous surgeon John Najarian . Each day, Jon Najarian gives three UOA trade ideas live in [emailprotected] with Jon Najarian. 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. Check out trade ideas from our UOA lineup: Exploring Unusual Options Activity Trade Ideas. Click here for our 3 keys to identifying potential unusual options activity in any market. It takes analysis and work, and then proper position sizing and management. Its a comprehensive process that takes more than just tracking large options trades using a free scanner. Reviewed in the United States on March 12, 2021. Najarian options activity on CNBC halftime report don't reflect strategy presented in this book. But this isnt the only time that a massive, out-of-the-blue option trade seemed to foreshadow an acquisition. However, most unusual options activity alerts dont neatly check all of the boxes on the above list. Customer Reviews, including Product Star Ratings help customers to learn more about the product and decide whether it is the right product for them. In other words, the trade clearly doesnt make sense. Those do not exist. Do Not Sell My Personal Data/Privacy Policy. : Dont be stupid though. Reviewed in the United States on June 6, 2020, Reviewed in the United States on April 1, 2021. Market Rebellion is not giving investment advice, tax advice, legal advice, or other professional advice. As discussed above, the term we use for Smart Money could be company insiders trading on inside information or institutional firms building large positions. Get a daily dose of unusual options activity. All Rights Reserved. Theyll be talking options trading as they break down the latest market action in the midst of a jam-packed week of earnings. 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. Download the free Kindle app and start reading Kindle books instantly on your smartphone, tablet, or computer - no Kindle device required. When done properly and viewed in the context of a complete portfolio, however, it can be a powerful tool for your portfolio. At the time, Twitters share price had been cut in half from its $80 all-time high reached in February of 2021. Three Keys to Identifying UOA. Najarian explained that this is a bearish bet because SQQQ is the short ETF and he thinks the trade might be a protection. 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. 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. Whether that something is an upcoming acquisition or news on a successful (or unsuccessful) drug trial, it doesnt matter. Many popular ones typically look at the ratio of volume to open interest in a particular option. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. Around 4,000 contracts of the January $43 calls were traded for about $1.10. If there is about to be a phase 3 drug trial announcement, it wouldnt be unusual to see implied volatility very high. Every day, Market Rebellions Heat Seeker algorithm flags dozens of potential trades. He explained that traders were buying the November 24 calls Monday. Finally, well give you a sneak peek at our unusual options activity trade alerts and connect you with additional resources to learn more. Instead, understand the process by which trade ideas are chosen from the potential unusual options activity. Eventually, Pete became the President of Mercury Trading. Everything youve ever wanted to know about Unusual Options Activityin one convenient insiders guide. All rights reserved. Pete Najarian loves the risk-reward for the trade and he decided to jump in the trade. And when news leaks, there are some greedy insiders who try to take advantage. 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. The orange dots indicate what we call unusual unusual options activity. 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. He jumped in the trade and he is planning to hold the position for a month. If there is about to be a phase 3 drug trial announcement, it wouldnt be unusual to see implied volatility very high. This article was last updated on 11/30/2022. Brief content visible, double tap to read full content. Price paid: The price paid is how much the option buyer paid for the option. 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. 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. This activity is particularly ripe for trade ideas. It just means that they passed the first level test. As small and nimble traders, we focus on capitalizing while these big funds are still amassing their market-moving position. 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. We, Yahoo, are part of the Yahoo family of brands. Follow The Smart Money is an excellent book for those who are interested in learning about options, the stock market, and unusual options activity. He also covers . 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. As always, thanks for being part of this growing Rebellion of traders. Learn more. 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. 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. Najarian jumped in the trade and he is going to . If the open interest is 100, that means thatacross the whole marketthere are 100 long contracts and 100 short contracts. 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. I'm so pumped!!!! Well keep you informed about all the additional, exciting developments on the horizon as updates emerge. 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. But, you should also realize that this is still a probability-based analysis. Follow The Smart Money is an excellent book for those who are interested in learning about options, the stock market, and unusual options activity. Specific securities or Digital Assets are mentioned for educational and informational purposes only. Watch and see how we follow the Smart Money with Unusual Option Activity. 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). Every day, Market Rebellions Heat Seeker algorithm flags dozens of potential trades. Amazon has encountered an error. 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. She is a popular actress, and was featured in the show Wall Street . It doesnt mean that the price of the stock will move. In effect, it is a gauge of interest in the contract at any point in time. By clicking below, you also agree to our Terms of Use and acknowledge our Privacy Policy. In general, its traders or investors with a lot of resources and critically information that we dont have as individuals. The stock rose, and more and more unusual options activity appeared. MILLIONS of options contracts are traded every day in the US. , Item Weight The orange dots indicate what we call unusual unusual options activity. 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. Follow The Smart Money is an excellent book for those who are interested in learning about options, the stock market, and unusual options activity. 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. But when done properly, it can be a powerful tool for your portfolio. 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. : If youre looking to trade UOA, you came to the right place. 2023 Benzinga.com. Investors are fully responsible for any investment decisions they make. 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. Pete Najarian spoke about high options activity in Taiwan Semiconductor Mfg. Lets add one more ingredient: what if those 10,000 out-of-the-money put options were expiring next week? Catch Jon Najarian on Fox Business with Charles Payne: November 30th, at 2pm EDT, and then once again in studio on December 7th. This article was last updated on 12/14/2022. Whats that mean in practice? BTW - I dont think there is an easy way to learn the Greeks. Submit your email and well send you an article that takes you deep inside the minds of our UOA analysts. Follow the Smart Money is a page turner and will open your eyes towards better strategic 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. Brief content visible, double tap to read full content. 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. 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. He loves the trade and he decided to follow it. Below is a chart mapping the likelihood that 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. He followed the trade and he is going to hold . 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. Ultimately, the stock kept surging from the $9 price point to above $60, before its price ultimately fell back lower. Klicken Sie auf Alle ablehnen, wenn Sie nicht mchten, dass wir und unsere Partner Cookies und personenbezogene Daten fr diese zustzlichen Zwecke verwenden. 2023 Market Rebellion, LLC. Najarian Brothers See Unusual Option Activity in $MGM, $DBX, $LVS & $ASHR Read more:. 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. You're listening to a sample of the Audible audio edition. It's mostly biographies of these crooks. Market Rebellion specializes in unusual options activity trade ideas. Jon and Pete Najarian have traded UOA for more than 30 yearsfrom when they were on the floor of the Chicago Board Options Exchange (CBOE) to today. , Reviewed in the United States on October 26, 2020. 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. Heres an example from February 2021. A lot of game changing information. 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. 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. In the meantime, be sure to follow Jons regularly scheduled, Rebellion-exclusive shows inside the Rebel Hub. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. Follow the Smart Money is a page turner and will open your eyes towards better strategic trading. 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). 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. 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. Wenn Sie Ihre Auswahl anpassen mchten, klicken Sie auf Datenschutzeinstellungen verwalten. In simple terms, you are looking for a trade that makes you say hmmm thats weird. Open interest is measured once a day at the end of the day. Last week, Market Rebellion identified thousands of bearish puts bought in Silvergate Capital. Please try again. On the opposite side, it doesnt mean that a large trade executed on the offer with a close expiration date is unusual. BTW - I dont think there is an easy way to learn the Greeks. Reviewed in the United States on October 26, 2020. Insiders offer one easy explanation for the source of unusual options activity. Top subscription boxes right to your door, 1996-2023, Amazon.com, Inc. or its affiliates, Learn more how customers reviews work on Amazon. There are many different ways to find trade ideas. Were giving up the possibility of home run trades in exchange for what we hope are more doubles and triples. And thats an exchange we are happy to make. Najarian Brothers See Unusual Options Activity In Melco, Pfizer, Nvidia and Abbvie by Benzinga Staff, Benzinga Staff Writer October 30, 2017 3:38 PM | 1 min read Speaking on CNBC's "Fast. 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. Open interest: Open interest is the amount of contracts outstanding in the market. 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. Surprisingly informative. Investors are fully responsible for any investment decisions they make. Your recently viewed items and featured recommendations. Find out more about how we use your personal data in our privacy policy and cookie policy. It was worth the price. Lets take a look at a few recent examples. Howd that play out? When we present a trade idea, we dont just regurgitate the trade that triggered the alert. 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. It's a comprehensive process that takes more than just tracking large options trades using a free scanner. Reviewed in the United States on May 20, 2020. I highly recommend it. 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. As an options trader, you have many different options for finding trade ideas. Almost 30,000 contracts were traded in the first half of the session. Try Unusual Option Activity Essential. 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. Whats that mean in practice? , . Please don't even THINK ABOUT BUYING! It is simply a measure of how many times a given security exchanged hands. Specific securities or Digital Assets are mentioned for educational and informational purposes only. Remember, were looking for activity that Smart Money traders are making. And when news leaks, there are some greedy insiders who try to take advantage. Follow The Smart Money - Unusual Option Activity - #1 Way We Choose Our Trades, Publisher Jon and Pete Najarian pioneered Unusual Options Activity trading strategies to follow the "smart money". Instead, our system considers things like how recent a review is and if the reviewer bought the item on Amazon. Some sites have compiled free screeners that use a one-factor model to present unusual options activity. Knowing what weve described about unusual options activity, the profile of the perfect trade is likely obvious. Market Rebellion is not giving investment advice, tax advice, legal advice, or other professional advice. Data rates may apply. Insiders offer one easy explanation for the source of unusual options activity. The ask represents the price at which someone is willing to openly sell the option. Supporting posts: Surprisingly informative. On the opposite side, it doesnt mean that a large trade executed on the offer with a close expiration date is unusual. Jon and Pete Najarian have traded UOA for more than 30 yearsfrom when they were on the floor of the Chicago Board Options Exchange (CBOE) to today. 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. However, options markets are still relatively small. First, well define what makes options activity unusual. Almost 16,000 contracts . These can be a good place to start, but are often cluttered with a lot of noise that you will want to narrow down with additional filters.