Tracking the Elephants
Remember the joke: “How do you know when an elephant has been in your fridge? Answer: By the footprints in the Jell-O.” Well, how do you know when the elephants are interested in a company? Answer: by the footprints in the stock option contracts activity. When the “smart money” (elephants) smells something happening in a company, they will normally position themselves to take advantage of the play by buying stock options-either calls or puts. Some option traders like to keep it simple and have
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