Bearish Buying: Breaking Down Unusual Options Activity with Jon Najarian

Today, on CNBC’s Halftime Report, Jon Najarian opened his segment on Unusual Options Activity by proclaiming “It’s an unusual day, Scott.” This as stocks fell dramatically, in part due to hawkish comments from Fed Chair Jerome Powell. 

For subscribers to our Oracle Hour, this drop came as no surprise.

Two weeks ago AJ Monte, our Option Oracle, laid out his case for why the charts looked bearish for the major indices. “This is a two week forecast — I believe $SPY (SPDR S&P 500 ETF Trust) falls to my inline target of $456.” As CNBC’s Carter Worth would say, AJ’s prediction was correct down to the penny as SPY cratered to $456 today, on the exact date AJ Monte had predicted. 

Options traders don’t see that macro pain ending yet though. 

Big bearish buying

This time, they’re targeting bearish put spreads in the Russell 2000 Small Cap Index ($IWM) to make that bet. 

Options traders also made huge purchases in the January Salesforce ($CRM) $280 puts. Salesforce reported earnings after todays market close, and it’s looking like those puts are already in the money. Bang!

It wasn’t all negative buying action though. Some institutional buyers were looking for opportunity on this down-day, and they found that with calls in Kraft Heinz ($KHC) and Devon Energy ($DVN). 

Listen to today’s clip below, where Jon lays out exactly what he’s buying and how long he’s planning to hold.

Learn how you can use the power of unusual options activity to conquer any market. Click here to download our Insider’s Guide to Trading UOA.