Why Not To Buy Not Rivian Calls With Two Days to Go?

It's obvious right? If you mess up and the stock opens the wrong way you only have one day for a rebound. Why put yourself in that position? Others might be in the camp of saying why not go for a fifty percent rebound on Thurday's morning opening. The stock sold of on Wednesday on very little volume. A morning pop is possible. The stock has being strong as of late. Here is it's five day chart. Now this, the seventeen series of Calls that expires in two days. They do look cheap after hitting a high of $1.55 on the day. If we look at a 30 day chart we will see that the stock is still in an uptrend. Why not look at the Call options one and two weeks out? Here are the seventeen series of Calls one and two weeks out They would be much safer to play and I will check in on these ones at a later date. So what happened on the Thursday opening? Let's switch gears for a moment and look at how Roku, a much higher priced stock opened and look at how their Call options moved.

"Caterpillar on Monday Mornings"

This blog may seem to be lacking in content. It is only to say that one should not purchase "last week" - "Call" options on Monday mornings.
Typically Monday morning aren't good entry points and case in point is what happened to "Caterpillar" yesterday, a Monday as it dropped over four dollars a share. One of "Caterpillars" characteristics, which in some ways is a good thing and in some ways not so good is that it often moves upwards or downwards in price on "no news". Yesterday was on of those days. The difficult part is, if you trade the options on this stock on a regular basis like I do you sometimes have the urge to want to jump in a play the upside whenever you see it sell off in price. This itch to "get back in" is most prevalent at the end of the first thirty minutes of trading on a Monday morning. This time "Caterpillar" seemed to be taking a hit and if you were able to buy in and catch a reversal you would be a hero and in doing so you would be able jumpstart your week of trading? I got sucked in yesterday. I bought in as "Caterpillar" continued to tank all day. How do you learn avoid this trap? There is one obvious way. Remember I have talked about having individual screens set up on your computer of sectors of stocks that you are watching like retail, automotive, spacs, pharmaceuticals or whatever you happen to have an interest in. In this case "Caterpillar" was the only stock on my list of "big movers" that was down. That in itself should have told me to stay away from the "Calls". Here is a look at the "Caterpillar" 245 "Calls" on the Monday morning selloff.
Shown above is an 11:30 a.m. chart. Now that it's down over four dollars in one day can we expect a rebound? As the hours dragged on in the afternoon the stock stayed pretty flat. Nobody knew why this happened. Now it is Tuesday. Would this be a good time to catch a rebound, this being day two in the week? Look at yet another drop on the opening? Yes, it could be a good time however at such a moment when your buying into options on a falling stock it's sometimes best to pick with an option with an extra week of "time value" built into them. Here now is what I did.
This series of "Call" options at this particular time look attractive.
The above quotes show the "240" series that expire this week while my fill is on a next week out 240 "Call" option position.
This next chart shows a rebound kicking in.
. I used this rebound to get out and all of this happened in just over an hour.
Did I sell out too early? Not really, here is how it ended up closing out the day.


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