Robinhood traders have been leading the retail trader renaissance…
While some of the companies they’re scooping up would be considered “dumb money” stocks…
There’s one Robinhood favorite that the “smart money” was all over on Thursday.
It’s one that will be on my radar this week.
You see, once the “smart money” piles in… that means they left a paper trail…
And since they “loaded the boat” with calls, this stock may go higher.
So which stock am I referring to and what was the activity my scanner picked up?
By now, you should know I love following the options market for clues as to where a specific stock can go.
How do I do that?
Simple for me, I just look at the options action that my scanner detects.
I noticed some action in Genius Brands International (GNUS) — a production company that focuses on children’s programming.
Now, this activity came in after Genius Brands announced it was holding a conference call on Monday.
That doesn’t sound like exciting news, right?
However, since GNUS is one of the hottest stocks on Robinhood…
It’s got a lot of hype around it…
That tiny announcement was enough to send the stock soaring.
You know what was even more interesting to me?
The options action was so wild…
More than 312K contracts on Thursday
Now, that’s more option volume than United Airlines (UAL) and Netflix (NFLX) had combined that day.
The thing is…
Some “smart money” players were all over this, and they left a paper trail.
You see, on Thursday afternoon, my scanner started going ballistic when a series of July calls started hitting the tape…
One options player came in and bought:
2228 Jul10th $3 Calls
Paying $0.50 Per Contract
In other words, they spent $111K on that one trade alone.
By the close, those options were already valued at $0.85.
In other words, the options player was up $78K in less than 3 hours.
But that wasn’t the only activity I noticed…
There were also 26K $3.5 calls traded and 19K $4 calls traded.
Is Genius Brands the real deal?
Can it run higher?
Only time will tell.
All I know is that this stock should be on traders’ radars right now.
As you can probably guess, there was money to be made if you understood how the “smart money” moves and how my “insider” activity works.
Now, I want to reveal to you why I find this information so powerful… and how I use it to my advantage.
The elite traders tend to use options to express their opinions on a stock, in my opinion…
And in the process, they leave a paper trail.
Allow me to show you how I follow their moves.
*RagingBull does NOT track or verify subscribers’ individual trading results and these individual experiences should NOT be understood as typical as or representative. Please see our full disclaimer here: ragingbull.com/disclaimer
With the markets closed today, I wanted to take the opportunity to share something very interesting with you.
In Jeff’s letter a couple days ago, he highlighted some of the hot stocks making moves in the sustainable energy industry.
And one of those stocks was Workhorse Group Inc. (WKHS).
I just happened to have a conversation right around that same time with our own Kyle Dennis, and he had some really interesting things to share about WKHS…
So today I am taking over the PennyPro so you can learn something new and potentially game-changing…
Workhorse Group (WKHS) has been one of the hottest stocks this week…
The stock finished up 46.57% on Monday…
And was trading 25% higher shortly after the opening bell on Tuesday.
The reason for the large run in WKHS?
The stock was added to the Russell 3000 Index yesterday and got a $70M financing agreement with an institutional investor this morning.
While the stock was hot… the options were scorching.
Today, I want to show you the activity I noticed, why it was so interesting… and why I believe it’s important to follow “insider” activity.
You see, I actually noticed some “smart money” activity on Friday. That option player nailed the trade.
So what was the specific activity that caught my attention?
With all the positive catalysts in WKHS… it makes a lot of sense after the fact why a “smart money” player threw down a large bullish bet.
Just three hours before the closing bell on Friday, someone came in and bought
955 WKHS Jul $15 Calls
Paying $0.65 Per Contract
In other words, they paid more than $60K on that trade.
What was most interesting about this trade was the fact that it went off when the stock was trading at $9.34.
That meant they needed the stock to rally by 60% just to break-even.
Well, on Monday, WKHS was added to the Russell 3000 Index.
What that means is there should be buying pressure as some exchange-traded funds (ETFs) that track that index would now need to buy shares to reflect the addition.
Not only that but…
On Monday, the stock caught a massive upgrade from the analysts at Cowen.
The shares caught a large pop after those two catalysts on Monday.
This morning, shares were rocketing again on Tuesday morning, after there was a press release announcing WKHS received a $70M financing agreement.
Was someone tipped off in advance about the upgrade?
Or did the options player just have perfect timing?
What I can tell you is those options were trading at $5.10 X $.520 at 10:25 AM ET on Tuesday.
In other words, that Wall Street whale could’ve made as much as $429.83K if they held those options.*
Imagine if a trader was able to follow that options player and bought just 25 contracts on Friday at the same price they bought them at.
That would’ve just cost $1,625 (excluding trading fees, if any).
If that trader was able to sell those options for $5.10…
That $1,625 could’ve turned into $12,750… or $11,125 in realized gains.*
The thing is…
That’s just one trade my Dollar Ace scanner picked up on…
If you want to learn how the “smart money” moves and the power of my strategy…
*Results presented are not typical and may vary from person to person. Please see our full disclaimer here: ragingbull.com/disclaimer
There’s a lot of headlines about the coronavirus and with cases ticking up…
I’m sure the major biotech and pharmaceutical companies are hard at work, trying to come up with a treatment.
One of the companies in the race for a “cure” is Pfizer (PFE)…
And news hit the wire yesterday…
I actually was in that trade and locked in a 156% gain.*
You’re probably wondering, “Kyle, how did you spot this trade… and did you just get lucky?”
Well, I can’t say luck didn’t play a role… but what actually told me PFE could pop was the “smart money” activity I saw in the name.
You see, my Dollar Ace scanner actually picked up a rather unusual options order in PFE…
And I want to walk you through my thought process when I saw this trade.
On Friday, June 26, I noticed one option order come up in PFE that looked rather interesting.
It was an unusual bet because PFE had a sharp pullback, and at the time, it looked like it was heading lower…
Especially with coronavirus cases ticking up.
The specific order I noticed was:
3681 PFE July 10 $32.50 Calls for $0.59
In other words, they spent a whopping $217,179 (excluding trading fees) to place the bet.
Of course, I waited for things to shake out before I got in.
I also wanted to conduct my due diligence.
So I knew that Pfizer and BioNTech have been working on a study of mRNA-based vaccine candidates which could be used as a vaccine for SARS-CoV-2.
Since they were conducting research, they would need to release data at some point…
The data was expected mid-July 2020 and those options that were purchased expire on July 10.
I don’t know about you… but that’s awfully unusual to me.
I let subscribers know about the action on June 29 on my watchlist…
And I decided to purchase calls…
I bought 50 PFE July 10 $32.50 Calls at .81 off the watch list.
I didn’t know the news or anything, just that the “smart money” was getting in.
That trader was right on their idea… and boy was I glad I followed them.
PFE and BioNTech announced early positive data from their ongoing Phase 1 / 2 study of the coronavirus vaccine candidate…
And the stock ran higher.
Although the stock made a nice move, the calls were where it was at.
The calls I bought for $0.81 the other day were worth $2.05 on Tuesday…
A whopping 156% return in a matter of days.*
Now, this wasn’t the only trade that was picked up on my Dollar Ace scanner.
If you want to learn more about how I use “insider” activity scanner…
Take some time out of your busy schedule, and watch this exclusive training session.
You’ll learn the power of unusual options activity and why Dollar Ace is one of my favorite strategies to use.