The Smart Money Playbook: 4 Unusually Active Options Trades to Be Thankful For

As the holiday season officially kicks off, the stock market gave us a few unexpected gifts beyond the traditional “Santa Claus Rally.” While many investors were busy debating the merits of Black Friday sales, institutional traders—the so-called smart money—were making massive, highly-convicted bets in the options market. Their activity provides a fascinating look into where the big dollars are seeing profit and, crucially, where they are seeking protection.

Here are four recent options trades that stood out from the crowd, making them excellent examples of strategic positioning in the final stretch of the year.

1. The Silver Rush: First Majestic Silver (AG)

If you were watching the options flow in the days leading up to the Thanksgiving break, you would have seen a clear, resounding signal for precious metals. On November 28, First Majestic Silver (AG) saw a surge in volume where call options accounted for nearly 90% of all option transactions. [cite: 7 from step 1]

This massive bullish conviction wasn’t a fluke. The stock had already been on a tear, gaining over 12% on that final Friday to close at $15.22, extending a two-week rally of nearly 25%. The options volume essentially served as a roaring validation of the precious metals story: a belief that silver’s momentum, fueled by strong demand and optimistic price forecasts, had plenty of room to run toward the company’s recent highs.

2. The E-commerce Giant: Alibaba (BABA)

Big Tech may have cooled slightly, but the massive call activity on Chinese e-commerce titan Alibaba (BABA) shows that institutional faith remains strong. On November 28, BABA saw over 129,000 contracts trade hands, with two-thirds of that volume being bullish call options. This aggressive buying came even as the stock hovered in the $157 range.

What makes this a trade to be thankful for is the implied upside. With a consensus price target from analysts sitting near $190, the large-scale call buyers were clearly wagering that BABA was due for a breakout rally, making the options trade a leveraged bet on a catch-up trade in the global tech and e-commerce recovery.

3. The Bearish Oilfield Play: NOV Inc. (NOV)

Not all unusual options activity points up. Sometimes, the smart money is a bear, and a profitable one at that. Following a disappointing Q3 earnings report, which saw Nov Inc. miss its earnings-per-share forecast by more than 50%, options traders piled into bearish bets. Specifically, the stock experienced a colossal 1,353% spike in put option volume. [cite: 3 from step 1]

This aggressive put activity was a move to be thankful for if you were on the short side. Despite the company’s revenue slightly beating expectations, the massive options flow indicated that sophisticated players believed the EPS miss and cautious guidance for the oil and gas equipment sector would ultimately drag the share price lower from its then-current $15 level. [cite: 3 from step 1, 7]

4. The Prudent Small-Cap Hedge: iShares Russell 2000 ETF (IWM)

Finally, the most strategic play to be thankful for is one of risk management. The iShares Russell 2000 ETF (IWM), which tracks the small-cap market, had been rallying hard, climbing almost 5% in the two weeks before the holiday.

Yet, amidst this euphoria, out-of-the-money IWM put options saw unusually high volume, creating a clear disconnect. This activity wasn’t necessarily a massive bet against the entire small-cap sector, but rather a perfect example of institutional hedging. Betting on a small-cap downturn with low-cost puts provides a powerful, leveraged form of insurance against the high valuations and potential uncertainty heading into December. The profits from this hedge could easily save a portfolio from a sudden market correction, making it the ultimate tool for a thankful and protected portfolio.