Issue 162: 20% in 30 days. Should you sell? - Masters In Trading

20% in 30 days. Should you sell?

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How to Find the Most Active Options Contracts

When traders scan for the most active options contracts, they inevitably end up seeing names like Apple, Amazon, Microsoft, and other very liquid, large cap stocks. However, what many traders don't realize is that there is a way to find hidden gems among these contracts. By looking at a stock's market cap relative to its activity, traders can find stocks that are disproportionately active compared to their size. This allows traders to find some hidden gems like with stock ticker $AI.

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Just yesterday, out of the 8 most active options, only one had a market cap that was under $160B. That stock was ticker symbol $AI. $AI has a market cap of a measly $3B. The next closest was $NFLX with a $160B market cap. This is unusual options activity—finding a $3B market cap stock next to trillion-dollar companies like Apple and Microsoft is noteworthy.

When looking for unusual activity options, it's important to remember that not all activity is created equal. Just because a stock is active doesn't mean that it's a good trade. However, if you see a stock that is unusually active relative to its size, it's worth taking a closer look. Unusual options activity can be a sign that something is happening with a particular stock, and by keeping an eye out for it, you can get ahead of the crowd and make some profitable trades.

By looking at a stock's market cap relative to its activity, traders can find stocks that are disproportionately active compared to their size. This allows traders to find some hidden gems like with stock ticker $AI. Just yesterday, out of the 10 most active options only one had a market cap that was under $160B. That stock was the ticker symbol $AI—a hidden gem worth taking a closer look at.

Hey TRADERS! I’m taking advantage of the recent success of my $MSFT position by locking in some gains. After a 20% surge in only a month, I sold at an impressive $273, and I am only covering up to 20% of my position. Buying back if it drops below $250 gives me plenty more room for upside potential with this stock- clearly, my bullish outlook hasn't changed!

Masters in Trading Digest - Issue 162

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My Biggest Stock Holdings of 2023 | $MSFT & $SQM

Thanks for reading,
Jonathan Rose

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