Thursday, March 11, 2021

Follow SC 13D filings to make money.

Find Form 13D: https://sec.report/Form/SC+13D


Many people know insider trading and follow that. Form 13D is something new, something peculiar and something that surely works. It makes sense. 

Whenever an activist investor acquires more than 5% of a company, he must report a Form SC 13D filing within 10 days. He must state his intent for his purchase of 5% of the company and if he's going to buy more. Key part. 

If a large investor is building a position we can front run him. Ta da! That's it. Buy stock or options whichever is applicable. I've seen this before that's why I'm saying. Not just theoretical. 


Main requirements/additives:

-High call options volume (look for specifically ITM and OTM if it's illiquid.)

-If liquidity is low (volume is low, bid-ask spreads are wide, usually there will be a spike in share price as the investor tries to acquire more shares.) 


Reasoning:

Usually the hedge fund/ investor will buy lots of call options to hedge against price movement so he can buy lots at the current stock price and/or stock option strike price. Look for ITM options with close expiry or in general high open interest in OTM call options if their is liquidity risk. If the bid-ask spreads are wide and any jump in volume can jerk the stonk price higher.

Happy Hunting! We need to create a screener for this. Will be amazing. 

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