To be quite blunt, unusual options activity could be hit or miss. It’s possible that aberrant transactions in the derivatives space can tip off retail investors regarding potential moves. The problem, though, is that nothing is ever so easy on Wall Street.
Look, the reality is that if unusual options activity was inherently predictive, everyone would trade based on that information. However, if that were to happen, whatever opportunity that existed would be arbitraged to extinction. It’s a Catch-22. But with that caveat out of the way, retail players ought to look closely at pharmaceutical giant Eli Lilly (LLY).
