Members have recently asked me to show more specific ways that I use unusual options activity in my work. Remember the checklist: 1) The market has to be in a confirmed uptrend/powertrend. 2) Then I like to gravitate towards stocks that have solid fundamentals and strong technicals. 3) Then I like to use the technicals for safe entry points. 4) Then I use unusual options activity (UOA) to complement the work that I am already doing.

Here are some real-time examples:

On Thursday 10/24/24, Constellation Energy (CEG) saw a buyer of 1000 of next week’s $270 calls for $4.60 to $4.90. Vistra (VST) also saw buyers of next week’s $127 calls. 2000 for $3.40. Does this mean something HAS TO HAPPEN? Of course not, but it’s definitely interesting to me. Maybe an announcement is coming because there are a lot of data center-related tech companies reporting next week.

Now, I combine this UOA with the fact that VST and CEG are sitting right on their 21-day EMAs, and Thursday was the LIGHTEST VOLUME day for both stocks in the past two months. A potential sign that the sellers are drying up. I used this information to add to both positions on Thursday. Right before the close, more UOA came in on VST with 1000 Dec $135/$155 calls spreads at $5.10 and sellers of 2000 Jan $125 puts at $13.60. So, not just short-term calls, but ones going out over the next few months. Again, I want to stress that this doesn’t mean something HAS TO HAPPEN. As with everything I do, this just adds to the potential probability of these stocks moving higher. If they break down or show weakness, I cut my losses.

Another example is Vertiv (VRT). I added it to the Focus List recently and it’s done well over the past month. Their earnings on Wednesday morning were strong, and it found support near its 21-day. Late in the session on Thursday, someone bought 925 of the Jan 2026 $160 calls for $13.10 to $13.25. I use this information to give me added conviction to hold the stock. I can explain this in more detail during Saturday’s Webinar.

Two other quick comments. Nvidia (NVDA) continues to consolidate well, as it builds its handle. Just be patient. I feel that it’s going higher into March. Sweetgreen (SG) is also consolidating well on light volume and remains near a buy point. Good luck and see you on Saturday.