Reading The Options

What we look for in this strategy is for the stock to be rising in the short-term and higher than average option volume within calls either one strike in the money or one strike out of the money. We only look at same month calls or one month out for this approach. The idea is to attempt to spot those with knowledge of news, such as a buyout, that will boost the underlying's price, trying to surreptitiously capitalize on the advance information.

The stock has slid a little, but was up over $5 early in the day's session.

This strategy contains some risk, but the rewards can be handsome.

Until Monday,

Duke

P.S. I will not be doing a Live From TradersWire Friday, due to my travel to Las Vegas for TM2001. I look forward to meeting several of you there.