Posted on March 6, 2018 5:19 am

Unusual Options Activity and The Week Ahead: March 5th, 2018

Bullish Start To The Week, But What’s Next? 

It’s been a bumpy two weeks for the indices. A few days have seen massive dips and recoveries. One saw a 300+ move in the dow in the matter of a few hours.

[jump to the options flow]

A fair amount of newer traders haven’t traded high volatility market situations like this.

It panics them. It makes them overtrade as they try to recoup losses…usually resulting in more losses.

If the above applies to you, calm down and slow down your trading a bit…

Take a step back sometimes. Think of it like this…if you had bought 1 share of $QQQ on February 1st and done nothing with it, you’d be breakeven as of today. If you had bought one on February 5th as the market seemed to be recovering and held through the dip, you’d be up a fair amount.

 

$QQQ chart for February 2018

 

 

With that said, there’s actually a great deal of money to be made during market gyrations like that. The zig-zag da of last week were ripe for directional trades. I’ll write an article about how to trade those in the near future.

Today I wanted to recap some of the strongest unusual options activity I noticed today and late last week. There are names I definitely recommend you watchlist.

“DrosFlow” Unusual Options Activity

In the free trading room I run, I post my favorite unusual options activity through the day. After a while, my fellow room members began dubbing it “DrosFlow” (shout out sip).

[I also text these alerts for free. You can sign up here]

Here are my most recent alerts…the screenshot is from the trading room.Some of these have moved up quite well already, others are still ripe. Check the charts and do your due-diligence before entering any of these trades. These are just ideas, not financial recommendations.

unusual options activity march 2018

“Strongest” Unusual Options Trades For Monday, March 6th, 2018

[strength here is based on the % of the contracts traded @ ASK, the volume vs. OI, large individual orders and a few other factors.

 

Bullish
$DATA APR18 $85 Cs
$CRIS APR18 $2.5 Cs
$SHLX APR18 $22 Cs
$SQ MAR18 $54 Cs
[also the $AMRN and $PCAR mentioned above]
Bearish
$LULU MAR18 $56 Cs [sold] to finance the purchase of MAR18 $80.5 & $77.5 Ps
$EXR JUN18 $85 Ps
$MLCO JAN19 $23.68 Ps
$HRTX SEP18 $11 Ps
$FXC MAR18 $77 Ps

As For The Week Ahead?

It seems reality has set in that the proposed tariffs aren’t going to result in as massive a systemic price shift as to really impact the bottom line of some of the companies that have felt its’ effects. The market was strong today but on pretty low volume.

If headlines hit about other countries threatening trade wars, the markets will definitely dive/dip. Paul Ryan has already brought this to the headlines, which could actually mean we see a down day tomorrow. As of this writing the futures are pretty flat, with the S&P down .50 and the Nasdaq and down both up around 7.00

Or there’s the possibility that Trump does back down from the tariffs. The Financial Times reported a few hours ago that the President linked the tariffs to NAFTA renegotiations.

With these conflicting narratives, we’re likely to see some more choppiness of the sort we saw last week. Let’s find out.

That’s all for now. Trade smart and safely. I wish you all the best for some profits this week.

Cheers,

Rish

 

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