Whether you trade the mainline securities or the underlying derivatives, it’s always worthwhile to consider unusual options activity if such a pathway is available. Unlike myriad other indicators of the financial markets, aberrant behaviors in the options arena often represent a forward signal.
What distinguishes stocks under the unusual options activity label is the broadcasted sentiment of the smart money. The derivatives market is the arena of sophisticated traders due to its inherent complexities.
To use a sports analogy, unusual options activity is akin to getting a peek at your opponent’s playbook. It doesn’t guarantee a favorable outcome but you’ll be better prepared to make smart, relevant decisions. With that, here are three stocks to watch now.
This post originally appeared at Money Morning.