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CarMax Puts?

 Here is the number. Call in to listen to their just released quarterly report. You won't have to talk to anyone. It is 800-839-1247. In about five days this link will disappear. Please listen to it. I listened to all of it once and to the first half of it two times. What I learned is that their retail car sales on the quarter compared to the same quarter a year were up 6%. They purchased 336.000 vehicles from the public, up 7% and 48.000 from dealers up 38%. Their average retail sale price was $26,100, down $400.00 per vehicle from last year. They doubled their share buy back program. AI technologies are now helping them operate more efficiently. Everything seems positive. But wait, we are talking about  the used car business and what could happen if consumer confidence suddenly starts to wain? Look at it's three year chart. It now sees to be hitting a rough patch.  Now a one month chart.  All of this talk about tariffs and what level of tariffs will be imposed on n...
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Power Surges in Option Trading

If your an "Uber" driver working in the downtown core of major cities you know about power surges. If a subway breaks down and the system is broken hundreds of people suddenly need rides. At the very same time the rates you charge will spike up. That's the best time for "Uber" drivers to be out driving. Well playing options on stocks with a day or two to go until they are about to expire is kind of the same thing. Friday May 7th was one of those days. If we look at "Boeing" and "Caterpillar" we will see two examples of what I am talking about. First "Boeing" and it's one day chart and a look at it's 230 "Call" options and it's 232.50 Call" options. What specifically we are looking at is the highs and lows on the trading price of the option series. In the first case there are two sets of numbers. A low of .51 and a high of 6.90 and a low of .16 and a high of 3.40 That's the price swings of the options in one day.
Here now is a look at the "Caterpillar" "Call" options which mimic these same price movements. In this case we are looking at the 235 and 237.50 series of "Call" options and the numbers are a low of .80 and a high of 6.87 and a low of .18 and a high of 4.40
What was the juice that made for these staggering returns? Well in the case of "Boeing" is was the price drop that happened on the opening at 9:34 and in the case of "Caterpillar" it was the opening price drop that happened at 9:33 also on the opening. To catch it at it's extreme your timing had to be perfect. My timing of in at .60 and out at 1.81 on "Caterpillar" that I referenced in my last blog shows that my timing skills need some honing. Uber driver's take note. If your out driving on a Friday morning during one of your surges do what you do best and just keep driving. Don't be fiddling on your phone trying to make these kind of trades. The End.

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