How I made a personal 180 on big stock moves
Back when I was working on the floor, I was one of the biggest traders in the General Electric (GE) options pits – and I was always short gamma.
That means, in short, I didn’t want the stock to move!
And usually, with a relatively “boring” stock like GE, that was no big deal… until one weekend.
News broke of a huge, multi-trillion-dollar deal for General Electric, and the media coverage was ecstatic about the impact on the stock. (I might be exaggerating just a little about the size, guys; it was very traumatic for me.)
I spent the entire weekend sweating… only to watch the stock open up all of about 8 cents on Monday.
The “big news” for GE was no big deal after all, and that stressful episode in my early trading career confirmed one major truth for me:
Nobody should read news articles and trade on them!
In today’s stock market, more than ever, the only thing that matters is BIG MONEY.
That’s why my custom options scanners are built around low-priced, high-dollar options trades, so I can zero in on the most compelling big-money moves happening “behind the scenes.”
And now that I’m not managing a book on the floor, I’m looking to buy options on stocks that are ready to make a Fast, Aggressive Move in the right direction (FAR).
But even when I’m reading options signals right off my custom scanners, I don’t just pull any old trade and follow along with the flow.
I have three specific rules I use to identify the strongest trade candidates from the day’s unusual options activity…
My 3 Trade Rules… and a Bonus 4th
When I track big money trades on my options scanners, there are three general “rules” I want the activity to meet in order for it to be considered an “official,” tradeable signal:
- The size of the trade is $50K or more.
- Volume at the strike is greater than open interest.
- The contracts cost $1.50 or less each.
However, that’s only one side of the trade – the options side.
What about the underlying stock? How do I know it’s ready to move FAR?
One metric my subscribers hear me talk about all the time is Average True Range, or ATR – and it’s a key number I use to determine how high a stock might climb on a typical day.
My Double Confirmation System Code is new to 1450 Club members.
My “minimum threshold” for a stock’s ATR is $0.50, meaning it moves $0.50 in either direction on an average day.
When I buy calls on a stock, I add its ATR to its low of the day in order to find where a “reasonable” high of the day might land, based on historical tendencies.
This is a first for me…
For the first time ever, I’m offering QUARTERLY PRICING on my 1450 Club for an extremely discounted rate.
That includes access to my NEW Double Confirmation System Code – plus, daily LIVE trading sessions every Monday through Thursday.
Join me LIVE in 1450 Club before this offer expires.
See you there!
Founder, Profit Pregame