Trading can be tough for many reasons. But just as a general fighting a war may send on scouts, you too can scout out the options market for the best possible trades.
Understanding how a company’s options usually move can prepare you to find moments where they’re making unusual moves. And by looking at options with unusual activity, you can get an idea of where larger investors in the options market are placing their bets.
These larger traders—the so-called “Smart Money” on Wall Street— may not make huge profits, but they have a great track record of being right far more than wrong. Following options with unusual activity thus makes for a worthwhile use of your research time to scout out your next trading opportunity.