As I noted in yesterday’s issue, I’m making a conscious effort to up my teaching game across the board, because – as Monday’s sell-off demonstrated – you have to know what you’re doing out there.
When the market is volatile like this, it’s dangerous for rookie traders who have only ever known a bull market.
It’s even more dangerous for stock traders who don’t fully understand the options game – and decide to roll the dice by trading them anyway.
Sure, you might luck out once in a while with a big win or two, but without the KNOWLEDGE behind the trades, you’re destined to get smoked when the waters get choppy.
So as promised, I’m going to show you how I find stocks and options to trade each morning, using my vast set of Tom’s Tools, and I’ll cue you in on which stocks may be on my Watchlist each day…
Even better – I’ll pull back the curtain into the options world, showing you not only the data I’m looking at each day, but how to interpret it – and maybe even trade on it – on your own.
After all, while market volatility can be dangerous for new kids, it’s an educated option trader’s dream come true…
So hop in here at 11 a.m. ET for LIVE training with the Tom Gentile team…
And then continue reading to see which stocks generated Unusually High Call Volume yesterday – including one rumored buyout candidate that defied the bloodbath – and what the data tells you about market expectations for the shares.
M&A Buzz, Travel Prospects Lure Call Buyers
Each day, we’ll show you an interesting situation from one of the Morning Report tools from the TG Suite app.
There may or may not be a trade idea that goes with the education, but we will show you the situation from one of our scans each day that is deemed worthy to talk about, and you can decide from there if you want to act.
We may use the same Morning Report tool for more than one day in a row, if the situation warrants it. We will also try to mix it up regularly, so you get a well-rounded eye on the various scenarios we see.
Today, I am highlighting the Unusually High Call Option Volume list in your Power Profit Trades Watchlist.
The Tegna, Inc. (TGNA) January 21, 2022 $22-strike calls
top this list today.
You can see in the image above, the option contract is written as YYMMDD to indicate the expiration date, then C for Call or P for Put, followed by the Strike.
Tegna is a media company, formerly known as Gannet.
There are rumors the company may be bought out, which sent TGNA shares higher recently, popping above their 50-day simple moving average (SMA).
TGNA daily chart with 50-day SMA
Before trading news like this, it’s best to research further to see the prospective buyout price (if any), and any belief of further upside capability before acting on these yourself.
Per-share buyout bids can act as magnets for the stock price.
By purchasing call options that don’t expire until January 2022, yesterday’s CGNA traders are giving the story a few months to play out.
Ultimately, they expect TGNA stock to climb above $22 – the strike price – before the contracts expire, indicating they may expect a per-share buyout bid above that level soon.
Also on that list was the American Airlines (AAL) November $24-strike call.
Buyers of those calls expect AAL shares to surmount $24 before the options expire on Friday, Oct. 15.
Of course, yesterday’s bullish betting may have been unusual, per the Money Calendar data above, but it wasn’t altogether surprising, considering the headlines.
While most of the market got crushed, airline stocks collectively rose Monday, after the White House pledged to ease travel restrictions for Covid-vaccinated international travelers.
AAL closed more than 3% higher at $20.33, its highest finish in about a month.
I’ll talk to you again soon, but in the meantime, GET IN THIS ROOM for some LIVE training!