11/17 Recap

Pretty tame monthly opex session. Usually we get some big moves with all these options expiring, but so far nothing notable. The SPY to this point is closing with it’s third straight green candle and on a weekly chart, the move isn’t extended even though it is on the daily. This can run some more look at the RSI, until it’s overbought then I would worry.

Small caps finally look better than the overall market for the first time maybe all year. The IWM is putting in a bullish engulfing candle on the weekly with the highest volume it has seen in months. There is nothing to say here other than my guess is small caps outperform the market in the short term from here, they have underperformed by so much, a catch up trade isn’t egregious.

Yields continue to head lower as the TNX is looking at it’s lowest close in 2 months this week. The macd is rolling over negative as well, it isn’t looking pretty for the higher for longer crowd at this moment, but that can change.

One of the things that I find most amazing about all the options activity I post daily isn’t so much what happens with larger names, those tend to be tougher to gauge, but the smaller names that see crazy action and work, I just sit here and scratch my head when they make a crazy move. For me the issue my whole career was I had this data staring me in the face and I just don’t know how to put on enough size in what I deem complete junk to where it moves a book the size of mine. Which is why I stick to mostly larger names, nonetheless let’s look at BJRI which I highlighted exactly 1 month ago in the October 17th recap you can find here

That day someone came in and swept 4200 of the BJRI January $30 calls and that same session it closed +6% after that trade. This was the actual trade

4190 BJRI Jan24 30.0 Calls $0.525 (CboeTheo=0.44)  ASKSIDE  [BOX] 09:59:11.312 IV=48.5% +1.6 BOX 0 x $0.00 - $0.65 x 24 NOM  FLOOR - OPENING  Vol=5003, OI=85, Delta=18%, Impact=77k/$1.77m BJRI=22.94 Ref

The calls came in with the stock at 22.94 and the stock currently sits at 30.75 as I type this and those calls specifically went up 500% from .52 to over 2.50.

This was what I highlighted

So like I always tell you, pay extra attention to the smaller, odd names that you don’t see often, those are the ones where the most alpha is generated. I unfortunately did not take that BJRI trade, small restaurant chains aren’t my cup of tea, but it doesn’t matter someone knew what was coming when they put that on, that size was very outlandish in that particular ticker that had next to no volume. Very impressive move and I really do try my best to highlight the oddest stuff in the 5 names I highlight daily, but sometimes there’s just more in the table I post I don’t get to.

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