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?
Workhorse Options Gain More Than 600% In A Matter Of Days
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