Option trading follow the smart money
A specialist always buys and sells a stock all day long, scalping small lots of to stocks, buying them and then selling them a couple of cents higher. But this morning I saw that the specialist of the USB stock started to accumulate a big position. He was printing on a Tape As we know the second column represents the number of shares purchased or sold on that particular transaction.
He was buying them in big lots, 1 to 6 thousand shares at once, which would look as 10 to 60 in the second column. So I opened a long position. After he loaded up himself with stocks, he started to move the stock price higher. When I saw him selling out stocks in bigger lots that gave me a signal that we were approaching a local resistance level and the trade is loosing its steam.
So finalizing the strategy, the way to identify if a specialist is buying or selling is to look at the price of his prints.
When you see that a specialist prints out his trades at a price closer to Bid, then you can say he accumulates a Long position or is covering his Short position. When you see him printing out his trades at a price closer to Ask, then he closes his Long position or accumulates a Short position. Additional Considerations This method of trading is not sure-fire, but has provided me with some blockbuster trades.
In the last year I have been able to predict the demise of multiple financial stocks: Be Careful and look at the full Options Montage to see if the trading volume is part of a spread trade, a complex strategy, a rollover, etc. This part takes some practice, but identifying call and put spreads becomes easier through time, by looking for eerily similar volumes in various strikes. Also be wary of the intraday stock chart checking for large block trades that could be part of an options strategy, as a hedge such as a collar trade.
Lastly, pay attention to ex-dates on dividends because sometimes heavy option flow comes in for dividend stripping, a strategy for later discussion.
Helpful Option Tracking Tools Now that I have given you some of the secrets to this method of investing I will provide you with some tools to get started. Before that, please note that I provide analysis of the options market, and highlight anywhere from 10 to 20 trading opportunities daily, along with color regarding not only what is trading and who is trading it, but also why it is trading. I will soon be launching my own site blog at www.
Sorry, your blog cannot share posts by email. That was good for After that kind of move, I took a look at the rest of the report and learned it was an e-commerce company that provides wellness, beauty and lifestyle products. This is where we pay attention. In my high school science class, there was one kid who was brilliant.
I truly believe he could have taught the class. You know the kind of person I am talking about. Needless to say, I became his lab partner and I did much better than I should have in science. It was the smart move. Paying attention to what the billion-dollar institutions are buying and selling in heavy doses, is also the smart move and it can also become a very profitable move.
Rich people would rather be educated than entertained. For the past 18 years he has coached thousands of students to all levels of success in trading. He is also creator of the revolutionary Smart Money Elite.