The nuts and bolts of our system are the five bearish anomalies and five bullish anomalies listed here, all of which our system is designed to detect:

Bearish Indicators

1. Stock up but calls not up. (This signal is strengthened by calls trading below their theoretical value.)

2. Stock up but puts not down.

3. Conspicuously large put trades on no obvious news.

4. Suspiciously elevated out-of-the-money put premiums.

5. Stock flat or up but puts up.

Bullish Indicators

1. Stock down but puts not up.

2. Stock down but calls not down.

3. Conspicuously large call trades on no obvious public news.

4. Suspiciously elevated out-of-the-money call premiums.

5. Stock flat or down but calls up.

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Lafferty clients receive email alerts when the system detects an anomaly, with an analysis of the possible significance.

SOA is a free service to our active clients. Please call Doug Gilpin at 800-221-8514 for more information; email is dgilpin@rflafferty.com.