Although clamoring over the latest ebb and flow in the technical chart has become a favorite activity among retail investors, one of the most powerful tools you can consider is unusual options activity.
Institutional investors, hedge funds and other so-called smart money players often deploy options to take large positions in publicly traded securities.
Subsequently, a spike in call or put volume could indicate strong conviction from sophisticated traders. Such market participants may enjoy greater knowledge of the underlying business or may have access to superior research and resources. Either way, these folks can potentially move the market, meaning that their opinions (and more to the point, convictions) carry significant weight.
With that in mind, here are three stocks exhibiting unusual options activity that you should put on your radar.
This post originally appeared at Money Morning.