You know the type… the Wall Street traders who are lower than pond scum and will try to make as much money as they can, by any means necessary.
They’re egotistical and think they’re doing “God’s work” and are necessary to keep the wheels of the financial industry rolling.
These Wall Street “insiders” are driven by sex, money, and drugs…
… and get this, some of the largest investment banks still employ these types to this day — they continue to act on “insider information” and nothing’s really changed.
Goldman Sachs is one firm that’s notorious for its insider trading… and they’ve got more than 35,000 employees around the world — you better believe there are many doling out proprietary information.
I’ve been following these insiders for quite some time and doing my due diligence. Now, I’m legally profiting off their every move.
I think it actually helps to understand how insider trading actually works — by understanding the inner workings of the investment-banking machine, you’ll realize how lazy these guys are at hiding their trades.
There’s one interesting story from the mid-2000s involving a former trader at Goldman Sachs and a stripper whom he met at a gentlemen’s club.
The story involves two traders who met at Goldman Sachs (David Pajčin and Eugene Plotkin). Back in 2004, Eugene introduced David to his friend Stanislav Shpigelman — an investment banker at Merrill Lynch (now known as Bank of America Merrill Lynch).
These guys had an arrangement that allowed both David and Eugene to rake in millions of dollars on multiple occasions by trading stocks based on inside information.
That tight-knit circle netted $6.2M on just one single trade.
But here’s the kicker: David was trading through his “girlfriend’s” trading account, who was an exotic dancer. Instead of having her place the trades, David had the stones to pretend to be his so-called girlfriend and place trades on several accounts.
It didn’t take long for a customer service representative and Ameritrade to realize someone was committing fraudulent trades.
Ultimately David was ordered to pay more than $28M to the SEC.
However, that really doesn’t stop these insiders from acting on illegal information.
Heck, just a few weeks ago a Goldman Sachs investment banker was charged in an insider trading scheme… but he was released real quick after posting a $250K bond.
Bryan Cohen (the investment banker) participated in an insider trading scheme that needed George Nikas (who owns a restaurant chain GRK Fresh).
Cohen provided an unnamed trader with proprietary deal information and gave it to Nikas who used it to trade stocks.
The SEC noted the trader and Nikas pulled in millions in illicit gains in at least two different publicly-traded companies.
If history can tell us anything about the nature of these traders… they never get the point, and they will still continue to throw down massive bets.
I’ve actually developed a unique and simple way to profit off their every move — and it’s 100% legal.
How can you spot and take advantage of these insider traders?
Unusual Options Activity (UOA) lets us know there’s a high probability that a stock could have a massive move.
Basically, it’s a massive options order that hits the tape… and it’s generally placed by massive hedge funds and institutional traders.
You see, when you look at how much money they’re throwing down on long-shot bets… it tells us that the well-informed may be in the trade.
Take Fitbit (FIT) for example.
There was a ton of activity in the December 5.0 calls… we saw 5,000 contracts swept at $0.448… and 2,000 more scooped up at $0.446. That’s more than $300K in premium!
When they bought those contracts… it was pretty interesting because FIT was trading around $4.29 – $4.34, and it had a bull flag setup. Not only that, but FIT was right around a key breakout level at $4.50.
Take a wild guess at what happened with the stock the very next trading day?
The stock exploded and shot right through $5!
Heck, the stock got all the way up to $7.14 (as of Friday’s close)… and the options were worth $2.13!
Source: Yahoo Finance
That’s a whopping 373% move in those options in just about a week!
If you had just placed a $450 bet on those December $5.0 call options… you could have netted as much as $1,678.50 on the trade!
UOA spots some massive winners
We’ve seen this happen time and time again… take Tiffany’s (TIF) for example.
Options traders came out and threw down some wild bets on TIF:
- 323 TIF Feb 90.0 Calls purchased for $6
- 325 TIF Nov 29th $105 calls purchased for $1.56 (around a $51K bet)
- 281 TIF Nov 29th $105 calls bought for $1.47 (approximately a $41K bet)
They were throwing down hundreds of thousands of dollars down on the trade…
TIF actually gapped up around 30 points higher… and those options were worth more than $22… (I’m talking about the Nov. 29th calls that were purchased)
That $51K bet turned into more than $770K and the $41K bet turned into over $615K.
The thing is… you might be wondering, “Kyle can we actually profit off these trades… or are we too slow to compete against these massive funds?”
Yes you can profit off these trades, and it’s all 100% legal.
Heck, I actually spotted some UOA in GE the other day, and you can read more about the trade setup here.
If you want to learn more about UOA and how it could multiply your money week after week in as little as 5 minutes a day… click here to watch this exclusive training session.