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Heat Seeker IDs Unusual Action in White Metal

Wednesday, 25 Jan 2012 | 6:32 PM ET

Once again, Pete Najarian’s proprietary heat seeker has identified unusual options action, and he thinks the activity could forecast a future advance.

As a result Najarian has silver on his radar – specifically the ETF that tracks silver . “In the SLV, calls are trading at a 2 to 1 ratio over puts," he says.

Looking at the action a little more closely he says, “The Jan 32 and Jan 33 were extremely active. Also, “Feb 31 thru Feb 35’s are also active."

Najarian takes the action as a sign that although the SLV has already made sharp gains, institutional investors think the metal has more room to run.

But this is a trade, not an investment. "They're looking short term those institutional buyers, but they're expecting more."

Slow Money: What's the Low Rate Trade?
The Fast Money traders with the trade on SanDisk's earnings, and whether the play on the stock is over. Also, a look at unusual activity in SLV, and the Fed's pledge to hold rates low through 2014 pushed stocks higher on Wednesday, but low rates make income generation harder. What's the trade to offset the "bond blues"? The Fast Money traders, weigh in.

* You can find our full conversation with Najarian at the beginning of this video clip.







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Trader disclosure: On Jan. 25, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long IBM; Terranova is long SU; Terranova is long SJM; Terranova is long BRCM; Terranova is long MUB; Terranova is long EMC; Terranova is long F; Terranova is long SBUX; Terranova is long V; Terranova is long AXP; Terranova is long APC; Terranova is long OXY; Terranova is long TRLG; Terranova is long JNPR; Terranova is long CSCO; Terranova is long WFM; Terranova is long XOM; Terranova is long UNG April $5 puts; Finerman is long (JPM); Finerman is long (BAC); Finerman is long (PLCM); Finerman is long (IBM); Nathan is long AAPL Jan puts; Nathan is long BAC Jan puts; Nathan is long MS Jan puts; Nathan is long NFLX Jan calls; Nathan is long INTC Jan put spreads; Nathan is long MSFT puts; P. Najarian is long AAPL; P. Najarian is long BAC calls; P. Najarian is long C; P. Najarian is long JPM calls; P. Najarian is long MSFT; P. Najarian is long INTC; P. Najarian is long JCP

For Karen Finerman
Finerman's fund is long (AAPL)
Finerman's fund is long (JPM)
Finerman's fund is long (PLCM)
Finerman's fund is short (SPY)
Finerman's fund is short (MDY)

For Mike Khouw
No Disclosures

CNBC.com with wires.

  Price   Change %Change
SLV
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  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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