Unusual Due Diligence: 7/26/21

Monday; July 26th, 2021 - Hello everybody! Welcome to Unusual Due Diligence, a segment that covers my general end-of-day view of unusual options caught on Unusual Whales, a powerful tool that helps you analyze the live options flow and catch large trades that have the power to move the markets. We’ll take a look at my custom alert notifications and do some analysis on a few trades that catch my eye and discuss the opportunities and risks amongst each. We’ll also cover some topics around the most mentioned and take a look at the UW MobyDex to get an idea of what the whales are pushing for tomorrow. Stick around for more coming this later this week! Make sure you subscribe to get notified whenever I send these out, it’s free!

Remember: This is NOT financial advice and nothing I say or do should be replicated without doing proper due diligence. Please only invest whatever you are capable of and willing to lose.

Let’s start this off with the mentions of Reddit. $SPY seems to be the most talked-about today, followed by $BABA, $LCID, $AMC, and $GME. I’m not going to analysis on each and every single one, but I do want to do take a quick look at the $SPY, which is the SPDR S&P 500 ETF, and see how it performed today. SPDR is an acronym for the Standard & Poor's Depositary Receipts, the former name of the ETF. It is designed to track the S&P 500 stock market index. This fund is the largest ETF in the world and can give a slightly good perspective of what we may be able to expect tomorrow and the upcoming week, as it’s made up of the market’s top 500 stocks.


The $SPY rose by 0.26% today with some big jumps towards the upside in the morning and some dips below the previous close right after. Over the rest of the day, it slowly built back up and surpassed $441 by just a couple of cents. The average return of the $SPY is -1% to +1% on a day-to-day basis, which puts today’s performance at an alright level. It wasn’t the best, but it definitely wasn’t the worst. It’s at its all-time high, so there are no special areas we should be watching for. A good resistance point that’s ITM would be $440.50, which seems to be bouncing at pretty regularly, but it could have also just found a new resistance point at $441. If it breaks below $441, we could see it go back down towards $440.50, so keep an eye on that level.


Today, most people are placing Puts while about 48% of people are placing Calls. The premium’s looking to be about 51% Bullish, which is good for tomorrow. All of the FURUS are looking at the Bullish flow over the week, which means we can most likely expect some decent movement towards some new all-time highs. Overall, I’m not too worried about the $SPY dipping back down and showing us some red, but keep your stop-losses ready, as there’s talk about more restrictions due to an increase in Covid-19 cases across the country.

Now, let’s take a look at the UW MobyDex Indicator, which is an indicator based on the consideration of unusual option quotes that have been flagged by the Unusual Whales algorithm, watching a total of 60 different Tickers. The MobyDex indictor is always being calculated at the end of each trading day that helps you see where & if whales are forcing direction. If the MobyDex indicator is heavily negative, whales are expecting a downtrend at some point. If it is positive, they’re expecting a push to the upside. On Friday, the MobyDex gave a reading of -1,305.56, while today it gave a reading of -1,223.67. It’s still in the negatives, but it is better than the previous reading, which I always look at as a positive. The conditions for buying are still good, as negative readings show the market will most likely not be at peak conditions tomorrow. For current options that you’re involved in, be sure to set your stop-losses accordingly to protect yourself. Good selling conditions are when the MobyDex just passes the peak and shows its first large negative reading to the downside. Now, let’s take a look to see exactly what tickers are showing positive and negative readings, so we know what to keep our eyes on.


Now we can see exactly which tickers the Whales are either directionally Bullish or Bearish on for tomorrow’s trading day. Everything that’s in the green, expect some good movements, while everything in the red, stay strong soldier. Remember, the MobyDex is still negative, so this is only a rough idea of what we can expect. There is still the possibility of a negative trading day tomorrow, so please be cautious and make sure to set your stop-losses.

Now, let’s go over some of the custom alert notifications that I created which puts a focus on ask-side call options. Of the 131 general whale alerts, we were able to filter out a total of five today that met our requirements for the Greeks, which are based on the Unusual Whales End-of-Year Analytical Reports that goes over data regarding the highest winning alerts over the year of 2020. I created a document that goes over these Greeks, which you can find in my Google Drive folder under the tab “Guides”. Today’s alerts consist of three premium alerts and two free alerts, so be sure to pick up the Unusual Whales subscription to get access to this type of data!

Out of the five alerts we were able to filter out, only $SKLZ is a part of the MobyDex and is showing a +2.60 reading. It’s the very last positive reading on the table, which means it’s a little close to the neutral side of the market for tomorrow’s trading day. It also has an upcoming Earning’s date this week, which is very risky to play. For this reason, I’m skipping over $SKLZ and moving onto the next.


Option Chain for $BB $10.00 C 7/30/21

$BB is showing an extremely Bullish flow of greater than 85% when filtering by $2,000+ Premiums and looking at ask-side only with over 63,000 Calls and less than 10,000 Puts. When looking at the daily chart, $BB fell by 0.20% today but had some large movements to the downside and then back to the upside at the market open. Zooming out on the 5-Day, we see a high at $10.89 and a current price of $10.20. The most popular expirations are 7/30/21, 9/17/21, and 1/21/22 while the most popular price targets are $10, $11, and $13. Now, I’m going to pair the lowest price target with the most upcoming expiration for all three and take a look at their associated option chains. Here, I like to see if there are any historically high levels of Volume or OI and I also like to see a historically low Bid/Ask spread which indicates there’s room for movement towards the upside. In this case, all three chains are showing recent historically high levels of OI and/or Volume and recent historically low Bid/Ask spreads.


My final test falls on 3rd party indicators and analysis. I like to check a bunch of different websites from TradingView.com & Investing.com to ChartMill.com & MarketBeat.com depending on what I’m looking for. With TradingView & Investing, I specifically like looking at their “Technical Analysis” pages, such as the one shown above which shows me their indicators based on chart performance. This helps me get a general idea of how the stock is moving and what I should expect in the upcoming months or so. I will never take a trade when these indicators are showing all Sell signals while I’m looking at a Call. I like to make sure these signals align with the direction I’m looking towards. In this case, $BB is showing a neutral to buy indication on the monthly, which isn’t the best but it’s acceptable when everything else is looking solid. I’ll also take a look at a few other things such as Analyst ratings and institutional ownership, but I often don’t like trading based on those factors, so we’ll leave those out for this one.

In summary, $BB is looking to be a solid weekly to monthly trade. I’d like to see it break $11 before making larger moves to the upside, but until then, I’m focusing on a weekly play with my S/L set at -30%. The alert we filtered out had its expiration set to 10/15/21 with a price target of $13. Since being alerted, it’s grown by 2.33%. Previous levels of this chain went up to $2.00, where the ask-price is currently at $0.88. The Greeks are looking beautiful and I’m feeling confident we’ll see some return in the next coming days.

Remember: This is NOT financial advice and nothing I say or do should be replicated without doing proper due diligence. Please only invest whatever you are capable of and willing to lose.

Alright, Apes! That is all for today! I hope you enjoyed this segment of Unusual Due Diligence, please be sure to stick around for more coming soon! This week I only analyzed one trade because I wanted to go over my process thoroughly, but the next upcoming newsletter will have some more analysis on a small variety of different plays. You can follow these exact steps I showed you today on the other four alerts I included in this newsletter to get yourself some practice. Be on the lookout for my upcoming Economics Report where I’ll be breaking down a large variety of statistics on the current state of the U.S. Economy over the last quarter! Thank you for reading, and make sure you leave a comment with any input or questions!

I’m constantly looking for ways to improve my segments and make sure I’m giving out the most beneficial information possible. Please leave a comment and let me know how I can improve! I’d love to hear of different types of Analytics you’d like to see on a daily basis, things I’m missing, or even things that I should take out. Thank you, please let me know!

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