CAT Puts

Yet even after a drop like this it's five day chart looks somewhat normal. Now it's one day chart shown just below. On first glance it looks like its moving somewhat sideways however if you look closely you will see ten and twenty dollar interday price swings. Look at the high volumes of trading in it during the first thirty or forty minutes of trading as the stock zig zagged around and then more volume pouring into it around 2:00 p.m. when a second wave of selling pressure hit. Imagine getting into Puts around 1:00 p.m. and getting out around $2:00 p.m. Auto stocks in general did poorly on the day. Now look at Tesla's 30 day chart. We just had a 30 day period of scorching upward moves. Why fall into a trap of now trying to outguess this action? Note now I have mentioned 1:00-2:00 p.m. selling pressure on a Thursday afternoon. During that time period there was a fear of a second wave of panic selling. Short term option players have to learn to "focus on the moment...

Is this the first of more of the same kind of reports to come? Sales down 4.1% is not really all that bad a number but is it a precursor of more of the same to come? A ten dollar hit on the stock shows you the anxiety in the air with the possibilties of any sort of a rebound on the day next to nil. Carvanna is reporting more insider selling. It's sitting at lofty prices. They have a reputation for stock price manipulation and to have more news of insider selling coming out at this particular time of uncertainity is not a good thing. Here is how these two stocks opened on the day. First Carmax, it's down $12.00 Now Carvanna. It's down $13.00. Here is how two other major players in the same space also got hit. Bad news travels quickly. Welcome to the world of third quarter earning reports. In some ways these results were inevitable. *** Here is how these stocks mentioned closed the day. Here is how Carmax ended up closing. Trying to play it for tomorrow would be imposib...

I often talk about Wednesdays being turn around days for the markets. Today was one of those days. Netflix had a big drop and then came back a small bit towards the close. Look at this, the 1220 Puts on Netflix at the start of the day, a Wednesday. Can you see they closed Tuesday at $1,340? Now this. It's Calls. Now it's one day chart. Here how the Puts and Calls traded. The Puts more than doubled in price in the morning and the Calls lost more than half of their value. What's the importance of this read? Maybe there should be more energy put into tracking these moves. Costco options offer the same trading experiences. Three hour moves in mid week trading sessions on high priced stocks can can sometimes offer profitable experiences without the urgency of time (the time value premium on options) working against you.

I don't like overnight Call options on one week options going into a Wednesday mornings. The time value built into option premiums is to much. Let's follow these four one-day situations. 1) 2) 3) ...... 4) Let's check in tomorrow to see what option trading patterns we observe. 1) 2) 3) 4) So up 18%, 6%, 9% and down 57%. So my point is that there are no real gains to be had from holding overnight positions on Tuesday, on short term "one-week" Call options. Yes the D.J.I.A was down on the day and yes the sample size was very small. It's just that my feeling is that Tuesday night overnight Call positions just don't excite. Option trading is the study of enterance and exit points. Now here are the readings on Thursday close. 1) 2) 3) 4) So down 54%, up 66%, up 89% and down 45%. Yes the D.J.I.A was down a small amount today. So what does this tell us? The action of holding short term Call options purchased on a Wednesday going into Thursday is g...

Here is the chart on Monday morning. Are you attracted to it? It's Monday at 10:05 a.m.. Here is one series of Call options on Exxon to look at that expire at the end of this week. The volume of trading on these Calls and the number of open interest contracts is relatively light. Not many traders are getting drawn into this action. Why is it down? It's an oil stock and there is going to be a hundred reasons for this current sentiment of the day. Every day the sentiment changes. Everything good for this stock and eveything bad is stirred into one big pot and the end result is refected in these constantly changing numbers. Down $3.00 in one week. That's a big number. Now here is a look at how Exxon ended up trading on the entire day. It gets interesting. Here is how Exxon traded on the day. It dipped around 1:00 p.m. ..... Here is how the options traded on the day. At 3:25 p.m. they went as high as $1.30. It's Monday. Here now is how these Call options traded on the...