Issue 34: $BBAI - Unusual Options Activity Volatility Spike - Masters in Trading Digest

$BBAI - Unusual Options Activity Volatility Spike

Welcome to Issue 034 of Masters in Trading Digest.

In today’s FREE MIT Digest, we share a trade in a little-known stock, ticker $BBAI.

The Wall Street Wiretapper picks up massive options activity in $BBAI.

Oil continues to rip through $100 and beyond.

Bitcoin extends it’s rally, and NFTs come under SEC scrutiny.

Stay safe out there.

Good investing,

Jonathan

Want access to our NFT/Coins/Crypto class on Wednesday?
Make sure you clear your calendar for this special training on Tuesday where we will give you all the details on this exclusive class. 

Options Trade of the Week

Last week, Wall Street Wiretapper, our Unusual Options Activity scanner, powered by a neural network, started to get hits on $BBAI.

You can see the trading behavior below – starting on February 24th and continuing until yesterday, March 3rd.

Notice the Volume compared to the Options Volume 20D Average?

All the action looks to be on the calls, rather than the puts.

Additionally, notice how the “Implied Vol Change” column is net way higher from when these trades started on 02/24?

This was clear that someone was making a big bet on $BBAI.

We shared a straightforward trade idea with Wall Street Wiretapper members in our Monday briefing.  The trade was to consider buying the $7.5 calls in March for < $.25.  Traders who want to risk money on this trade can risk $25 for every 1 call they purchase.

Rocky (below) purchased 30 of the $7.5 calls for only $.15.

The risk in this trade is limited to your original investment.  Rocky can never lose more than $450 on this trade (30*15= $450).  

As you can see below, Rocky decided to cover his options for $.45, or $1350.   This locks in $900 worth of profit in 2 days, with only $450 of risk.

Great Trade, Rocky!

Are NFTs Securities? That’s What the SEC Wants to Know

If you are not already aware, the Securities and Exchange Commission is investigating whether certain non-fungible tokens qualify as securities if they should be regulated. 

According to Bloomberg, the US SEC has begun probing NFT creators and marketplaces to determine whether certain tokens qualify as securities and should be regulated as such. This report from Coin Desk examines why the SEC is Probing NFT Market.

Further Reading: Bitcoin Extends Rally After Biggest Gain in Year

The largest cryptocurrency was higher after jumping 14% on Monday, the biggest gain since February 2021.  So far the price has stopped just shy of $45,000.

 

Masters in Trading Digest - Issue 34

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FINAL THOUGHTS

WHAT TO EXPECT IN THE NEXT MIT DIGEST

Will oil prices settle? When will oil prices settle?

The energy sector is “in play” and that’s where we will continue to search for awesome trade ideas.  

My favorite trade in the energy sector today?  Consider buying stock in $PSX.  In Sunday’s trade email, and our Monday morning briefing we will explain exactly how to trade this undervalued Oil Refinery.

Keep your feedback coming into support@mastersintrading.com.  We’re excited to share your feedback along with fantastic suggestions for upcoming issues.

Until then, trade smart and always manage your tail-risk.

Thanks for reading,

Jonathan Rose

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