Featured

Caterpillar - Catching A Reversal On A Tuesday

Tuesdays are not the best of days to look for reversals however Caterpillar jumped a modest amount which impacted the value of this series of Puts. This is a 1:36 p.m. readout. Here is it's five day chart. Now its one day chart. It would seem like kind of a random thing to do and why fight a strong stock? One reason is that the markets are only mildly up and could give back some of it's gains before the end of the day. Caterpillar could be gaining strenght based on last weeks articles talking about how Caterpillar could potential gain from this new AI movement. Notice that the five day chart is in an uptrend and notice the small open interest numbers in the Puts. No one wants to hold Puts on Caterpillar when it is in this uptrend. Could it has a soft selloff in the next two hours? Here it is now 50 minutes later. The "bid and ask" are almost unchanged. There is also not much change in the DJIA index.Now this. The DJIA is sellig off and Caterpillar is hanging ...
Post a Comment

Some Notes on Playing Apple

In my last blog I almost made it sound to easy to play Apple Calls and Puts. Let me set the stage with yesterdays and todays action. First. here is how the market was up this Thursday and here is what I did.
This chart shows Apple's Wednesday and Thursdays trading movement. I bought Puts on Apple on Wednesday at 3:13 p.m. which was June 21st only to watch Apple jump upwards in price on Thursday morning. Biden made the news saying saying "We've struck a deal" refering to infrastruture spending and everything surged upwards. Obviously I was misinformed on current events. My Puts expire on Friday (tomorrow) which means all my money in this position is at risk. Then also I was running around all day doing other things and missed a selling opportunity to get out at a slight profit. Look at how this series of Puts traded today.
What did I learn from this experience? Well I should have paid closer attention to Bidens working schedule for the day. That's something you can google that. (Caterpillar and Boeing both surged on his news of infrastructure spending). I learned that on a Thursday morning when things are going against you with any short term option position you don't throw in the towel. I learned to be patient as Apple slowly sold off in the afternoon and I was accepting of just getting back my money. Smart money can play Apple. Look at how this series of Puts sold down the the 45 cent range on the strong openinging this morning. So many option traders consider Apple options to be one of their "go to" stocks to play. Very few options priced below a dollar a contract with two or three days to go before they expire can give you such a ride for the money.

Comments

Post a Comment

Popular posts from this blog

Living on Kraft Dinner?

Image
What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
Read more

The Little Engine That Could

Image
Walmart again. It's all I seem to blog about. Here is it's five day chart. The stock keeps going up and the option series are set up in one dollar spreads. Even a fifty cent move on the stock moves the needle on these Calls. Look at how this series of Calls was trading yesterday at 3:00 p.m.. Now here is this same series of Calls just before noon today. Thirty days of upward action like this punctuated by the off day of decline. Now notice the higher volume of trading in the series of Calls with the higher striking price. These are the ones's with more leverage. At the same time look at the five day chart on Costco. The two stocks sometimes trade in tandem. Humpty dumpty sat on a wall .... a had a great fall. Someday soon a fall might happen but what a great ride it has been.
Read more

Another Blog On "Vinfast"

Image
There is so much to read about this companies history online. Do your own homework. Their success is not dependent on what ends up happening with their sales in North America. They are nimble. There are plenty of auto factories all over the world now for sale they can acquire. They have dabbled in Australia. Having access to money to keep going doesn't seem to be their problem. Rivian also seems to enjoy this advantage. Vinfast is currently building a new plant in India which could employ thousands of people. That's an emerging new market. New relationships are being built and new investors will be coming onboard. Are option players looking at this stock? Not really if we look at these "one-month-out" Calls. What about Calls further out? What about next January? Here is a look at the three and four series of Calls. Nobody seems willing to bet Vinfast Calls. Now this. Here are two snippets taken from a blog I wrote about this stock back in early December of 2024. ...
Read more