CAT Puts

Caterpillar is up $40.00. at 340 p.m. Might it sell off a touch before the close? The DJIA ended up closing the day 1,024 points! Let's look at these three series of Puts series which expire on Friday. First Caterpillar. Now Tesla and a look at it's Puts about four dollars "out-of-the-money". Now Nvidia with a focus to be watching it's Puts. Once again I would like to mention than these Puts still have three full days of trading life in them. These ones are also slightly "out-of-the-money". Now jump ahead to the closing reading. First Caterpillar once again.The Puts we were watching closed at $7.10 only ten cents higher than what they were trading at when we first looked at them. The Tesla Calls however jumped up to $3.65 from $1.90 and the Nvidia Puts jumped up from $.75 to $1.25. .. This is one approach to playing super strong days in the market without losing any sleep. Puts can sometimes be your best friend. ** A special point to think about....

Nobody knows whats going to happen tomorrow. Let's jump forward. $1.64 or $164.00 dollars plus commissions will buy you one "310" series of Puts. In the first twelve minutes of trading only one contract traded. That just shows you how dangerous these option contracts can be. We are not talking about a one day move at this point in time. For option traders holding positions like this which were bought for quick flips an hour of watching the stock becomes a guessing game. Here it is now about seven minutes later. Note this, the pain continues? What's the DJIA doing? This becomes the path you are now on and it's to early to think about it becoming a dead end. If you still like the situation then yes you should buy more if you can afford to lose. Perhaps you made a big score on Disney Calls on the previous day. I have talked about that. Now this at 11:09 a.m. Still the same number of contracts traded. Hold these thoughts. Look at how the 310 Puts and the D.J...

Here are one series of it's Puts that expire this Friday. They are "out-of-th-money" so it's going to take a bit of a directional move to get a payout. Now it's five day chart. Is the stock going up because the DJIA is up? This to me is more a play on what the markets are doing than the stock itself. Here is how it closed the day. It's largely unchanged from where it was trading at back at 1:18 p.m.. Here is how the D.J.I.A. closed the day. Let's skiop ahead to Friday. It closed down 793 points. The 310 Puts had a good day.

Few traders like trading options on Disney because the stock constantly disappoints. Look at these Calls which expire this Friday. Options on stocks in the 100 range offer good leverage and Wednesdays at noon mark the "middle-of-the-week" inflection points. Let's see what happens here. These Call options expire on Friday. To be continued. Now this, 36 minutes later. Is that good enough of a return? $1.05 was the low of the trading action. Now look at this "bid-and-ask" thirty-four minutes later! Mid week trades like this do happen. ** Here is how Disney closed the week. Wednesdays sometimes see market reversals.

On Monday I talked about two things. First I talked about catching Tesla dropping in price as the markets sold off after a super strong initial surge upwards. Then I talked about Calls on a stock called Super Micro Computer and how it's seventy one year old co-founder got arrested causing the stock to drop over 30% in one day and playing it using Calls for a slight rebound. Both of those situations were one day, relatively straight forward trades. This blog today on Tuesday leading into Wednesday is different. Home Depot jumped upwards in price on Monday partly on "self-promotional" news and then dropped a touch. Here we now are looking a Home Depot at 1:30 p.m. on Tuesday. As you can see it has rebounded somewhat. The DJIA is trading relatively flat. .... It's a good news story but might it be running out of steam? Once again, at 1:30 p.m. according to the volume of Puts bought it looks like it is not going to. Traders do not appear to be jumping into the downside. ...