Warren Buffett once sold more Coca-Cola puts than I’d ever seen.

I was a market maker back then, making markets in long-term options. He sold every strike, every term, every long-term option. He just smashed everything.

Traders kept buying those puts, the prices kept getting lower and lower, and he just kept selling them. The traders on the other side got annihilated. To this day, I’ve never seen anything like that put selling volume.

Big money leaves a fingerprint in the options market. 

Once you know where to look, it can tell you where institutions are putting their money before the stock moves.

And right now, the open interest in one beaten-down stock is absolutely insane.

Who would sell all those Coca-Cola puts? The question almost answered itself.

A put seller collects money upfront and agrees to buy the stock at a set price if it falls there. Buffett wanted to own Coke anyway, so he’d take the yield or he’d take the stock, and either way he was happy.

Another thing people didn’t realize in those days: Buffett also held one of the bigger piles of U.S. Treasury securities. He had the most liquid money for margin calls, or anything he needed, at all times.

He didn’t get rich because he was stupid.

What Institutions Do With Their Money 9 Times Out Of 10

Stocks go up when multiple institutions buy hundreds of thousands of shares, and those institutions use options too.

If you put a gun to my head and asked me what they do with their money, I’d say short-term, they mostly sell calls. Long-term, way mostly, they buy calls and sit on them.

Nine times out of 10, institutions buy long-term calls. They do not sell them.

A call is the right to buy a stock at a set price before a set date. When a fund buys calls that don’t expire until 2028, it’s telling you it expects the stock to be a lot higher a couple of years from now.

You can see it in the open interest, the number of option contracts still open on a stock. When open interest in long-dated calls keeps climbing, institutions are getting into the stock.

I want to see at least 5,000 contracts. Anything less is too lightly followed by institutions for me.

I don’t know if it’s our secret sauce, but that assumption comes from 15 years of making markets in long-term options.

The 200,000-Contract Fingerprint In Snap

SNAP is a stock that kind of slipped by. It made a 52-week low, and then it ran about 10% in two days.

Since April, open interest in the 2028 calls is up something like 150%, by my count. There’s almost 200,000 contracts of call buying in there, and not a lot of float. The calls are not very expensive, but it’s a lot of call buying.

I have a fairly big position in Snap. The stock retested its low, and the open interest is absolutely insane. If you want to see what crazy call buying looks like, pull up Snap’s 2028 calls.

Snap won’t make it as a Sybil trade, but it is an institutional open interest trade. A fingerprint alone isn’t enough for Sybil.

I want the stock bouncing at least 10% off its 52-week low, I want the market to like its latest earnings, and I want open interest expanding after that bounce. The best signal, of course, is when everything comes together.

Sybil watches for exactly that inside the Ceres Club. 

It tracks every stock coming off its lows, counts the institutional call buying day by day and fires a trade when all of it lines up. When it fires, I put the trade on that same day.

Join The Ceres Club And Get Sybil’s Next Trade 

Andrew Giovinazzi