Yesterday, I said big money can trick you

But sometimes big money is just flat-out wrong. 

This is what happens when you are losing and stubborn about it…

This buyer keeps doubling down on their losing CHPT calls, and it’s costing them big-time.

This is what NOT to do. 

It’s important to learn both from the SMART money moves and the stupid moves too – making sure to only piggyback the right plays. 

But it isn’t always obvious whether buyers are doing something smart or ridiculous.

This is why I do a deep dive on each move I see to find out what is really happening.

Another sweeper came in with a call spread across CBOE in EEM…

EEM is up about $0.40 and this buyer paid about $0.30 for a 2-point vertical that is $4 out of the money with about 3.5 months to expire – it’s not an awful play…

But I don’t think that’s the whole story.

Here’s what I think the EEM buyer is planning…

Notice the open interest on calls…

It looks to me like they are rolling down – which means they were wrong, but they think they’ll be right soon.

This buyer is worried that EEM might not get to $46, but they want to maintain upside exposure – so they paid $600k to move the strike lower.

That’s a hefty price tag, but if they turn out to be right later, it will be worth it to them.

They still like EEM to go up, but it’s a conservative roll down because they aren’t sure EEM can make it to the original price in time. 

I don’t piggyback rolldowns because that means these trades have been wrong.

So while some big money traders should give up and cut their losses, we have a shot to make a better play or learn from – and not repeat – their mistakes.

In fact, I’ve perfected a strategy that doesn’t just track and copy these big-money trades…


The trade that the big-money is ignoring.

And you can learn all about that strategy right here.

Until next time,

Mark Sebastian


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