Hey Traders,

I typically look forward to tomorrow for a trade idea today.

But this time, I want to go way back decades ago to the beginning of my trading career.

It’s 1991.

I’m at the Ceres Cafe in downtown Chicago, sipping my second Vodka martini at the bar, and listening to a fellow market maker talk about the orders she filled that day.

What she said that night changed my life.

She unknowingly taught me a lesson that fundamentally changed the way I view trading.

First you need to understand that Ceres is not a popular spot for the average person.

It’s gross. It smells. Everything is beige.

But every night it was packed. Especially this particular night in 1991. It was always busy because it’s 400ft from the Chicago Board of Trade.

And each day after the market closed, the people who secretly run Wall Street would pour out of the Chicago Board Options Exchange and through the doors of Ceres.

I was one of them.

Now, the market’s true kingmakers didn’t choose this spot because it serves breakfast or mediocre chicken pot pie, meatloaf and patty melts.

And not because, like an old-fashioned speakeasy, the bartenders pour gin so loosely, a reporter from the Chicago Tribune compared it to a “fire hose spewing hard liquor.”

But because over the years, the fate of hundreds of billions of dollars was decided from this viewpoint.

Note Ceres’ famous “four-finger pour” above.

It’s where hundreds of market makers debriefed every day after moving the biggest money on Wall Street.

On this particular night, I was scanning the bar to see if anyone interesting was there when my friend – a fellow market maker – said something to make me snap out of it (back to my story).

“Wait….what did you just say?” I asked.

“I filled a huge CocaCola order today. Tens of thousands of puts sold, and it’s the third day in a row they’ve done this. I have no idea who’s on the other side of this but… they’re making a huge bet Coke is going up.”

This was interesting to me because 1991 wasn’t the time to bet stocks would go up.

In fact, everyone was betting the opposite.

Wall Street was trapped in the middle of the infamous Savings and Loan Crisis that would eventually see half a trillion dollars go up in smoke.

Stocks were at all time lows. The trading floor was so quiet and empty I expected to see tumbleweeds.

No one – and I mean no one – was betting stocks go up.

Until this Coca Cola buy.

I finished my martini and went home. The next day, I tracked the order.

Again, tens of thousands of CocaCola puts sold. Again and again… for nearly three weeks. Every day, no one was buying ANYTHING, only this huge position in Coca Cola.

The position got so large it was the only thing any market maker was talking about, and at one point I even remember it moving the ENTIRE market up.

Fast forward six months later, and Warren Buffett announces he has taken a huge stake in CocaCola, over $100 Million. Ahha! Our put seller. Over the next few years, the position I first heard about across the bar at Ceres went up 728%.

To this day, Buffett is still holding this position.

To 99.99% of people, the conversation I had at the bar would have meant nothing.

To me, it meant everything.

It was the difference between being on the right or wrong side of the market. It was the difference between a six-figure win and a six-figure loss. It was the most important conversation happening about the market in the WORLD that day, and it happened on $13 dollar stools in a dimly lit, dingy bar no one had heard of and no one ever went to… except those who had access to the most important moves in the US stock market..

What I realized over the next six months as I watched the one conversation I had about Coca Cola in early 1991 turn into billions in profit was this:

You could be the best option trader in the world, but if you’re not in a room where you can follow institutional buying, you’ll never win.

Never.

Because you know what I didn’t do back in 1991 when I heard about this order?

I didn’t follow it.

If I had, well… let’s just say I wouldn’t be here writing this to you today.

Institutional interest dictates EVERYTHING.

It did back then, and it still does today.

And right now, we’re in a unique market position not totally unlike 1991.

Interest rates are pushing most value stocks down.

Heck, even the aforementioned Coca-Cola is down 2% in the last month.

No one wants to buy these stocks right now.

But when you follow the institutional interest … it tells a much different story.

Look out for more on that this week. Stay tuned.

To Your Trading Success,

AG