The second half of 2020 just started…
And I believe there will be more action than the first half.
I was able to lock in nearly $2.4M in gains during thus far…*
Mainly by focusing on catalysts.
Of course, the key is to be able to uncover these catalysts and develop trade ideas around them.
The easiest way I know how to is by…
Following The Money Flow
Now, I’m not talking about trying to figure out what the retail traders will do next…
How do I do that?
By using my Dollar Ace scanner.
However, with these “smart money” trades, it doesn’t signal to me what the exact catalyst will be…
Just where the Wall Street whales are placing their bets.
If this all sounds confusing at first… don’t worry…
I’ll show you how this works with a “smart money” trade I saw in Cloudflare (NET) yesterday.
Does Someone Know Something About Cloudflare?
When it comes to identifying “smart money” trades, I have a scanner that lets me know when my filters are hit.
On Tuesday, one of the trades that hit the scanner was NET.
Why was this trade so interesting?
Well, on an average day, NET will trade about 4.6K call options…
However, by 11:13 AM ET on Tuesday…
More than 31,210 call contracts had already been traded.
Another interesting fact was that the calls outpaced puts by 56-to-1 at the time.
In other words, a bulk of the action was bullish.
That tells me there can be a potential catalyst in the cards… one that could send NET higher from these levels.
One that I see right now is the rise of hackers right now, and with an upcoming election… things can get even wackier.
With Cloudflare being a cyber-security company, I think demand could pick up for it.
That said, someone may know something we don’t…
And there was one “smart money” bet that stuck out to me.
Just 23 minutes after the opening bell yesterday…
An options player came in and bought:
1933 NET Jul $40 Calls
That trader spent $0.98 per contract, or $189K total to place the bet.
At the time, the stock was trading at $35.13
Another interesting part about this trade is that Cloudflare has earnings on August 6th.
However, these options expire before that catalyst.
Could another catalyst before the July expiration date?
This options player thinks so, in my opinion.
You see, they needed the stock to rise by 16.6% in just 16 days, at the time.
Now, those options spiked by 40% a few hours after the trade yesterday…
But I believe the “smart money” is looking for a bigger move.
This is one indicator I’ll be focused on a lot right now because I think it’s important to know where some of the largest players on the street are placing their bets.
Now, if you want to learn how I use this information and indicator to my advantage…
*Results presented are not typical and may vary from person to person. Please see our disclaimer here: ragingbull.com/disclaimer