One Week Options. Are They A Good Bet In Times like This?

Look at how these these four stocks traded last week. 1) What a great week for one week Call option players on Boeing even though the stock ended up down .83 cents on the week. 2) Roku. Roku hasn't yet recovered from a not so good quarterly report. Roku lost $1.13 on the week. (Netflix in somewhat the same space was up $35.780.) 3) Disney suprised. I talked about that in a recent blog. 4) Now Caterpillar. It was up $12.83 Now The D.J.I. was down .11% or basically flat. In good times Call options can be your best friend. To be continued.

"Looking at "Ford" Options And Trying To Illustrate How Volatile They Are"

Let's start with a definition of volatile. "Liable to change rapidly and unpredictably, especially for the worse". "Ford" is priced somewhere in the $13.00 range with with volatile "Put" and "Call" options offering excellent liquidity. Here now is a five day chart on "Ford" and here is the closing price of the 13.50 series of "Call" options. Let's see what happens tomorrow.
Bid .14 and ask .15. Buy one hundred contracts near the close today and see if you can get out tomorrow morning and make $500.00. Yet then again the chart is going sideways so what happens if the stock sells off on the opening tomorrow and your stuck with "out-of-the-money" Call options" with only four days life left in them? That wouldn't be fun to wake up to. The chart doesn't help us very much. The point is that looking for directional moves on stock early in the week is a difficult game to play. Here now is the next days action. What a drop in price.
Bid .07 Ask .08. Down half price on the opening. The "Puts" as shown in the following cart have doubled in price and more. Yet look at how small the volume is on the "Puts" compared to the volume on the "Calls". That's always the way it is. People tend to have a bias towards playing the upside.
With this type of downward momentum is it not now time to looking at the upside again? Here at 10:35 a.m. are are a look at the 13 series of "Calls" and a new five day chart. It's suprising what can happen in the market in just ninety minutes of trading time.
Would you ever want to play in this type of action? More trading news to follow. Here now is an end of day, five day chart and a look at how the 13 series of "Call" options ended up trading. Let's remember we were previously looking at the 13.5 "Calls" which have quickly become orphans. So many players are in the 13.5 "Calls". What caused today's decline? All I could find was some chatter about "Ford's" output being off ten percent or so last year. Why is that news now relevant?
Wednesday March 17th after the close and a look at the 13 series of "Calls". Look at their interday low.
Now a Thursday after the market closed recap. "Ford" closed the day at 12.50. The early morning upward movement did allow an opportunity for yesterday's "Call" option trader's to bail out at nice profits but you had to be nimble. Look at how they spiked to the upside!
Here is where it starts to get really interesting. Look at where the 12.5 "Calls" are with one days trading life left in them. Notice how the open interest in these "Calls" shrunk considerably. It's dangerous holding onto options going into their last day of trading life. Here is what happened. Friday turned out to be an up day. At 12:30 p.m. with only a few hours of trading life left Ford was way up in price. The .08 cent options went up to over .40 cents.
What a ride for a lucky few. To read my most recent blogs scroll up and hit the back button. The blogs directly below are older posts.


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