6 Dec - read the comments from the bottom... my final comments on "unusual options activity" type twitter posts and CNBC hits is that if you are following along looking for a 5-10 bagger and / or are expecting a big winner at options expiration you are likely to have a loss like the Dec6 205 Facebook calls from below...INSTEAD if you are going to follow along, take some profits after 25-50% winners but be careful you don't twist your ankle jumping off the bandwagon. at least sell enough of the position to get your money back and let the rest run. I use the information as another tool in the toolbox for selecting strikes, maybe to chose a different strike, or maybe to not make the trade. I don't follow just because Jon / Pete / or a twitter subscription seller posts it. If I'm in the position I'm more likely to sell the option they are highlighting since the heard that follows along will push up the price.
26nov update- posted that I closed the short 200call at .40 today at 75% of max profit... so that gets me started about the "unusual options activity" comments. now giving everyone the benefit of the doubt that maybe they took profits or didn't tweet an entry or exit... this is prime example of why I don't break my ankle jumping on the unusual options activity bandwagon.. I listed below that Pete noted the options activity, the Dec6 205, want to say at $1.25 or $1.35 going off memory. as I type now after hours those are priced at .55... for shits and grins a day or two ago I looked at their price and high of day was $1.85 so I guess you might have captured a decent percentage gain if you had the discipline to exit. my assumption is that profit targets where started at a 50% winner to start exiting the trade or the CNBC viewer crowd that was piling into the position after the on air mention were expecting a rapid move thru 205 to get the 2-3bagger.. Bang! like Doc J says. so I'm assuming those buyers are showing a loss now. like I've said before I think as many false positives happen if you blindly follow the unusual activity metric. the twitter hero's that also follow this or have their own subscription service will also cling to ANY unusual activity even from months prior to claim the activity foreshadowed the stock move. I'm going to stick to my method of just filing away any usual activity and possibly using the info to help determine a strike vs following along with the activity outright.
22Nov - been working the FB calendar spreads pretty good last few weeks. had the short 197.50 calls, rolled those to next weeks 200s for a small credit. i dont religiously follow unusual activity like Doc J and Pete and several on Twitter if follow. I think the activity gives as many false positives as outright winners plus the heard effect of the CNBC viewers piling into whatever gets mentioned runs the price up a bit. I take the info and put it in the toolbox with everything else.
So Pete mentions unusual activity at the dec205 calls. now the stock doesn't have to blow thru 205 to make money, just heading in that direction causes the option price to increase and will get a nice percentage gain just off that. I was considering rolling my 197.50s to next weeks 197.50s for a larger credit. bring in a bit more than usual expecting the much anticipated correction everyone is looking for.
so in this instance im using Petes info as an assumption that the stock will go up a bit towards 205, thus why fight the heard, I rolled the short call up to try to keep stock from blowing thru my short strike. im ok with this keeping in mind my underlying long DITM 2021 call is gaining in value.
Point being, im using the unusual options activity not by following the crowd but by helping me decide where to roll my short calls. the Najarians seem to have a good thing going so more power to them, im just not fast enough to follow nor will I subscribe to a service. The twitter heros always point out how the large options activity preceded the move but never mention the ones where nothing happened
heres the segment on fastmoney halftime with the unusual activity
https://twitter.com/HalftimeReport/status/1197581270756286464?s=20
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