The contrarian traders strategy is not as simple as taking the opposite side of the public's widely held viewpoint. A stock that goes higher and higher for an extended amount of time will naturally gain a lot of positive sentiment - this does not mean that a contrarian investor immediately hates that stock. Going against the price trend is always a tough way to play. The approach is to look for stocks where the sentiment is counter to the established trend. In other words, the contrarian looks for stocks going higher despite a significant amount of pessimism.

The reason behind this strategy is that the pessimism indicates a lot of investors have been avoiding that stock, and are therefore sitting on the sidelines. If that stock continues higher, then at some point, the sentiment will change and that sideline money will (hopefully, all at once) begin to flow into that stock, thereby driving it higher in a short amount of time. The fast and furious rally is especially beneficial to those that are contrarian options traders.