CAT Puts

First, forget everything you know about Tesla's current state of operational history. Forget their news about their new factory in Germany, their new models and how many kids a fifty four year old fellow named Elon Musk has. Focus on the moment. In this case it's a Thursday afternooon and we are looking at options on Tesla it that expire the very next day. The interesting thing in this situation is that we are catching Tesla trading flat on the day. It has maintained for the last 2.5 hours a slight predisposition to the upside. Now this as we approach 1:00 p.m.. We find a price of $4.70 for the Call option shown above. These Calls are just slightly "in-the-money" and expire the next day. Things could change even before the end of the day. It takes big money to buy in and the risk is high. I get it. The Puts will also cost you chunk of money. It's Tesla and you are trading with some of the ...

Here is a classic "step-down-chart" with one minute of daytime trading life left in them before the markets close at 4:00 p.m.. The stock is Nio. ... This printout of "in-the-money" Call option also shows one minute of trading life in them before the market closes. It's Tuesday and these Calls expire this coming Friday. You are purchasing three days of market trading life. To purchase one thousand shares of this stock would cost you $5,750.00. To purchase options that control the price movement of one thousad shares of this stock for three trading sessions would cost you $370.00. ( Ten contracts at $.37 each). These Calls are also currently $250.00 "in-the-money" which means if the stock totally goes flat for the next three days your options will still have that amount of intrinsic value left in them. Now think about this. Many option accounts in the U.S. enjoy free option trading and there are discount brokers in Canada who can save you money. A fl...

The premiums are to expensive. Here is what I mean. Look first at Nvidia. Now look at the price of it's end of week Calls and Puts. Do you see the prices of $7.14 and $720.00? Those are both crazy high numbers. If we look at Walmart it's the very same story. Super expensive Calls and Puts if we are looking four days out. Suprising Exxon with a much more interesting five day chart have options that look somewhat reasonably priced. Look at how few Exxon Puts there are outstanding compared to the Calls. Few traders see any positive Middle East developments. Now consider how this narrative is so much different than the one day action I talked about yesterday on Nvidia's last day to expiring options. One day options offer so much more action. Let's revisit this blog over the next few days or so to add more commentary to this story. Now the Puts on Exxon at the close on Wednesday. Let's check back on Friday's close. * Nvidia went from $222.32 down to $215.33, Wal...

The stock jumped on the opening and settled down thirty minutes later. Here are the details of that move. .. During this time period the real action was is buying the Puts just after it jumped on the opening. Now let's jump back to the 225 Calls at 11:46 a.m.. Do you get the feeling that this is just a game of luck? .... Now back to it's five day chart. Stop, stop stop. It's kind of crazy to be watching this stock in the hopes of making money on it's one day moves. Or is it? Look at the spike it had back on the opening on May 13th. Isn't the spike it had on the opening today a repeat of the same situation? Let's make use of the "strategy". Is it a strategy to be fighting Nvidea on a Monday morning opening (purchasing the Puts) after you see an early morning trading rally? I would say yes. * Here is how the 225 series of Calls where trading at 3:00 p.m. which was the deadline time to get out. One-day option trading on Nvidia has a wide following.

First here is how the stock traded on the week. It's not very often you see a chart that looks like this after a company comes out with a quarterly earning's report. One would expect that if a stock goes up on an earning's report it will usually stay up. How good was it's earning's report? Yet sales were down 8%. All the while something else had happened. A few days prior Ford made this remark. Details of what this all meant were somewhat vague. Is Ford going to start transitioning itself out of the automotive industry? During World War Two Ford started building airplanes called the B-24 Liberator after first building the "River Run Bomber Plant". When Ford starts to talk about building something new the entire world listens. Isn't it true that the stock Caterpillar has also hinted of following a new path diversification? Here is what I am talking about. This "Ford Energy" notion came out only days before their earning release news. Was ...