![]() However, year after year, my Cabot Options Trader portfolios have soundly outperformed the S&P 500 using this strategy to help find the next hot stocks. Will following hedge funds and institutions into similar trades work 100% of the time? Without question the answer is no. And because we bought call options, we also participated in this stock move, locking in a profit of 365% in just six months’ time. These large call buys by the trader turned out to be well-timed as GM went on a meteoric run from 30 to as high as 65. With Zaccaria, it is almost overwhelming, the number of good looking tables to play. It has the size, but the Goettlieb content is underwhelming, about 30 worth playing. That being said, we may be transitioning into a GM/KO/DOW type of market, which makes this call buy a great risk/reward opportunity. Without Zaccaria, however, this table becomes more a pinball monitor via OTG. ![]() Please note, GM is unlikely to rally $20 in the blink of an eye like stocks such as Peloton (PTON) or JD.com (JD). The most you can lose on this trade is the premium paid, or $470 per call purchased. This also follows several big buys of longer dated calls in the last two weeks, and because the price of GM options are so inexpensive, I am going to add the stock to the portfolio today. Here are those trades:īuyer of 2,000 October 31 Call for $1.62 – Stock at 30.15īuyer of 11,000 September 31 Calls for $1.12 – Stock at 30.5 And one of those cyclicals that is performing well today is General Motors (GM) which is also attracting call buying. The market is having another wild day of rotation as super-hot growth stocks are getting hit hard, while cyclicals are rallying. Repeated bullish activity day after day.Īn Example of Following Unusual Options Activity Straight to the Moneyįor example, in 2020 when the call buying in GM hit all three of these signals, I sent the following trade alert to my Cabot Options Trader subscribers:īuy General Motors (GM) March 31 Calls (exp. ![]() Large amounts of money put at risk by the call buyer.Big call buying in comparison to normal trading volume.When examining unusual options activity (specifically call buying), I am looking for these signals: Find out how in this free report, How Options Work-and How to Hedge Portfolios with Options. With little knowledge on the best strategies, you can use options to work the odds in your favor and make trades that have up to an 80% probability of success. ![]() Once considered a niche segment of the investing world, options trading has now gone mainstream. Free Report: How to Hedge Portfolios with Options ![]()
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