I trade Unusual Options Activity (abnormal volume in calls or puts) because more often than not, these trades result in a stock making a major move.
Today we saw a trader buy over 3,000 BVN March 18 Calls for $.60. This order cost over a $175,000. Each contract entitles the option buyer/owner to buy 100 shares of the underlying stock upon expiration. BVN has an ADV (Average Daily Volume) of 1,350,000 shares.
I speculate that this trade could be a hedge against a short stock position because the stock looks like it will see massive resistance $16.80. Therefore, I did not buy these Calls.
Also, after yesterday’s Fed announcement has made me very skeptical about buying any Calls in the near future.
