By Pete Najarian, co-founder of OptionMonster
NEW YORK -- Even as the Russell 2000 led the major indices lower Thursday, upside options were active in its exchange-traded fund.
OptionMonster's tracking systems detected a strong buying pattern in contracts on the small-cap iShares Russell 2000 Index ETF (IWM). The Weekly 82 calls, which expire this afternoon, were particularly busy with more than 52,000 changing hands. The Weekly 81 and 83 calls traded heavily as well.
Calls lock in the price that investors must pay to buy shares, so they can be highly leveraged to a rally. But the short-term options bought Thursday have only Friday's session to pop, or they will expire worthless.The fund fell 1.41% to close at $80.62 after trading as low as $80.17 in the afternoon. The broader market sold off Thursday as traders anticipated a bearish employment report later this morning, following an ADP labor report on Wednesday that was much worse than expected. Total volume in the name exceeded 640,000 contracts Thursday, almost twice the average amount. Najarian has no positions in IWM.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV