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Unusual Options Activity: A Week in Review — January 11th

Pete Najarian was on CNBC’s Halftime Report today to talk about unusual options activity he spotted in Advanced Micro Devices ($AMD), Tesla ($TSLA) and Exxon ($XOM). But before we get into that, let’s take a look at how Pete’s picks from last Friday performed.  JD.com ($JD) is up a nice +12.82% since Pete announced UOA […]

By Market Rebellion · January 11, 2022
Unusual Options Activity: A Week in Review — January 11th

Pete Najarian was on CNBC’s Halftime Report today to talk about unusual options activity he spotted in Advanced Micro Devices ($AMD), Tesla ($TSLA) and Exxon ($XOM). But before we get into that, let’s take a look at how Pete’s picks from last Friday performed. 

JD.com ($JD) is up a nice +12.82% since Pete announced UOA on the options chain.

Kraneshares China Web ETF ($KWEB) is up +7.01% since Pete announced UOA on the options chain.

Kinder Morgan ($KMI) is up 3.69% since Pete announced UOA on the options chain.

Charts courtesy of TradingView.

No explanation necessary: These are stellar gains. Even if you were buying shares, an average return of 7.84% in three days is great. But these traders weren’t buying shares, they were buying options, meaning their gains were exponentially higher. This is why we follow unusual options activity so closely… because the smart money is usually spot on. 

It isn’t hard to see examples of this elsewhere, either. Unless you were living under a rock, you probably heard about Nancy Pelosi’s winning trades over the past year. Before they became major talking points all over Fintwit and financial news headlines, those trades were unusual options activity. Thousands of Microsoft calls bought back to back in the same day, during a major pandemic drawdown? Sounds unusual to us. And what was the result? An incredibly profitable trade. Just another example among many of why following the smart money pays off. 

Now, you can look back and scorn yourself for not buying those $JD or $KWEB calls from Friday, but that won’t do you any good. We cannot travel back in time. As traders, it’s important to keep our eyes facing forward, and our minds towards the future. After all, in the options world, there will always be another great opportunity. It’s up to the individual trader to have the conviction to enter a trade and, more importantly, the discipline it takes to manage and close the trade when appropriate. With that in mind, let’s look at Pete’s calls from today.

Unusual Options Activity: Pete’s Picks

Advanced Micro Devices ($AMD) $135 calls expiring THIS FRIDAY 1/14. 10,000 purchased for an average cost of $2.47 per contract, above the open interest of 4,766, while the stock was trading at $133.82. Those options went on to trade as high as $5.45 later in the day – an increase of more than 120%. 

Tesla ($TSLA) $1100 calls expiring THIS FRIDAY 1/14. 20,000 purchased for an average cost of $14.05 per contract, above the open interest of 11,896, while the stock was trading at 1,071.78. Those options went on to trade as high as $19.10. 

To see what else Pete had to say in today’s episode, take a listen below.

BONUS: In his final trade, Pete called Exxon ($XOM), which saw huge buying in the $70 strike calls expiring this friday. Check out his quick bull case for Exxon below.