Insiders at Play with Billions at Stake in a Few Seconds

Insiders at Play with Billions at Stake in a Few Seconds

There’s never a juicier insider trade than a medical or pharmaceutical stock.

Think of the possible price movement when an FDA decision goes one way or another … it can look extreme on a chart, but that’s just a representation of what could be BILLIONS of dollars at stake in just a few seconds!

In this bulletin, I’m going to show you two drug-related stocks … one past and one present.

Back in 2015 Pharmacylics made a 100% rise in just six weeks as a result of (a) a stellar earnings report that was followed six weeks later by (b) its takeover.

So what? That kind of activity happens all the time, doesn’t it?

Well yes, it does happen from time to time.

But nearly every time this sort of thing happens, home-based traders are left behind and out of the profit bonanza, while the fat cat insiders, corporate financiers, and banks seem to gorge on the move.

Want proof?

Here it is …

See the cut-out chart below …

Do you notice the thick blue underneath the chart?

That is the activity of professional options traders who somehow picked up on this stock and raked in over 300% in profits while the stock made its last 69% gains.

These guys were insiders, make no mistake about it. The rest of the market was caught completely unawares.

But these guys were on the take … and take they did!

It’s plain as day to see.

Now, what about today?

Well here’s a stock that has shown similar activity … Envision Healthcare.

Do you notice that same thick blue line forming under the price chart for over a month now?

That is the activity of professional options traders … or at least it was until the last two weeks.

Because during the last two weeks EVHC has become subject to rumors of a takeover, and you can see for yourself that well before the rumor escaped the professional money was accumulating.

That is the activity of professional options traders … or at least it was until the last two weeks.

Because during the last two weeks EVHC has become subject to rumors of a takeover from KKR, and you can see for yourself that well before the rumor escaped, the professional money was accumulating big time.

So, what about this stock now?

Well if the takeover happens then the price will explode, and this time both the insiders and traders not in on the inside will profit in a big way.

If the takeover doesn’t happen, then the stock will collapse.

So what do we do?

We wait for the upward breakout to be confirmed, and only enter on a new high being formed, provided the blue shaded line stays blue.

What’s the lesson from all this?

The lesson is that not all insider scoops remain on the inside, but the vast majority of them do. If the KKR deal does happen, this will be one of the very few occasions where the average trader could have benefited from such an authentic rumor…

Unless they have access to that blue shaded line, and they know what the options insiders are up to.

But like PCYC before, a big move in the stock can mean billions at play, and even larger percentage gains for the options professionals.

Which means this …

If you want to make the biggest gains, figure out what the options pros are doing.

That advice came from my two great options mentors when I did my Finance MBA, over 21 years ago.

They may not have realized just how dogged I would be in following their advice!