What watching the paper tells us

BY ANDREW GIOVINAZZI

January 29, 2024

Yo Pit Crazies,

Sign up for the OP conference and trade live and learn a thing of two when Chicago is beautiful.

Frank was on it when he was looking at DC scuttle and thought the Biden Adm would halt new export licenses for gas Read that here. My trade is probably a close here but with stock going up I can work a lower stop now for my Exxon Mobil Corp (Ticker: XOM) and see if there are any legs to the oil stock move which I think there is.

Friday’s trade action pushed up the implied vol in the Feb02 cycle for XOM calls. Buying the XOM Feb02 108s? Jeez, I would love it if they are right. When paper is taking liquidity from the market, implied volatility goes up. Paper is the public and anyone not an option market maker.

Mark, Licia and myself will talk Carmax Inc (Ticker: KMX) and Carvana inc (Ticker: CVNA)

Paper is doing something in CVNA.

Massive Bullish flow jump into CVNA

A couple of my favorite market sayings are:

The stock market is not the economy

Stocks move for different reasons outside of a company’s business

The last one I made up. I also like, “options love a bull market.” I made that one up too and use it on the OptionsInsider Radio Network all the time. Right now, paper loves, loves, loves upside calls in CVNA and plunked down a cool $1million on it.

CVNA is prone to squeeze which has little to do with the company’s business and everything to do with the mechanics behind loaning stock to traders who want to short companies. A short squeeze can send stocks into the stratosphere. Remember Gamestop Inc (Ticker: GME)?

If you want to see our trade for CVNA or KMX, check out the Ticker Show from this morning. Grab the app from Option Pit Alerts or call customer service at 888 Trade 01.

If you want to see Frank and Myself parse the DC madness, check out Cap Gains.