As we always say, it ain’t illegal to trade the options that the insiders trade. We’re just copying what they do, and they do it very well. Case in point: we wrote about Crocs Inc. (CROX), and CIT Group (CIT) yesterday and today CROX was a double and CIT Group was up 400%. Polaris Industries (PII), we wrote about 2 days ago, it’s up over 7 times.
We told you yesterday about a big call buy in Crocs Inc (CROX) the day before earnings. Someone bought 4852 of the August $15 calls in CROX. We thought that was a ballsy buy the day before earnings (and one you’d think the SEC would be looking into, if anyone was awake over there).
Surprise! Crocs (CROX) announced stellar earnings and a rosy Q2 outlook along with a snazzy business plan. CROX took off to the races closing today at $16.68. Those August $15 calls that were bought fore 70 cents were closed out at $1.60 for a quick double plus a bit. Maybe that trader just had a lucky guess?
If you thought CROX was nice, just yesterday afternoon, we wrote a reminder about the big call buy in CIT Group (CIT). A big trader had bought 1700 + CIT Group October $48 calls a few weeks back at 95 cents. The stock had come down since then so we reminded you yesterday that you could get in at a large discount to the smart money, buying at 43 cents late afternoon, right before earnings.
This morning, it was all sunshine and rainbows as the company announced stellar earnings, a buyout of a bank, AND a share buyback was being initiated. It doesn’t get much better than that! We sold our (much smaller) position early this morning at $2.15, having bought it for 44 cents the afternoon before.
And then there was Polaris Industries (PII), which we wrote about on July 20. One smart trader had his crystal ball out and bought 865 August 140 calls when the stock was trading in the $132 range. Today, bam, PII closed the day at $145.52 having hit a day high of $146.68.
Those options were up over 7 times the original buy-in. We unfortunately, did not take advantage of this nudge from the smart money on this one. Too many earnings plays already in the hopper, and these don’t always work out. But at least CROX and CIT did come through for us.