Featured

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...
Post a Comment

A Look at A Boeing Call and A Friday Morning Story

Some seasoned option players don't like playing Boeing Call or Put options that expire that day. Either buying on a dip on the opening or buying in on a Thursday afternoon after 3:45 p.m. When pressed as to why they are of that opinion they sometimes sight other individual airline stocks they like better. Given good news airline stocks priced in the 30.00 or 40.00 dollar price range can go up 50% in a matter of a couple of weeks. Why not just follow a handfull of airline stocks and wait for something good to happen? When you play Boeig options you're at the mercy of countless news releases, each one seemingly more important than the last one. It's a roller coaster game which some traders get tired of playing after they tally up all their wins and losses from doing it at the end of the year. Playing short term Boeing Calls is not a way to think big. Lumber prices dropped dramatically in the last little while. Did you know that? Big thinkers played it down and made lots of money. Trading Boeing isn't like that. Here is the lumber chart.
Cheers to Boeing opening stronger on the opening. If you are a reader of this site you might remember how I recently traded Boeing in the premarket before the stock opened on a Friday? Will history repeat itself again? Look at what I bought about three minutes before the closing bell yesterday which was a Thursday. I wonder what will happen this Friday morning about 9.5 hours from now? I don't have a feel one way or another. It tanked on the opening on Thursday and it was down on the day. Is it worth it to try and trade such small numbers? Well I made lke $50.00 trading Caterpillar about ten hours ago. Was that worth the effort? I do like swimming in a sea of sharks. I am just a little fish.
I look at it as being a learning experience and its always fun to keep learning.
Here is what the overnight futures market is doing. If you ever going to put yourself in this position maybe the outcome of this experiment might help you calm your nerves in your first attempt at doing something like this.
So here is what happened on friday morning. In option trading things can sometimes go wrong. Late last night I had a scam alert call from the bank saying my account was blocked... someone with my account number was trying an uber eats run. I was instructed to get to the bank in the morning to get a new card, ugh. My Visa card was also hacked a few days earlier and I am waiting 7 to 10 business days for a new one. What this really meant was that I was precluded from trading in the premarkets for technical reasons. I didn't have a valid access code. Others things sometimes go wrong like the Brokers trading platform crashing or a message at 3:57 p.m. when you trying to make a trade asking you to change your password. Here is where Boeing was trading at in the premarkets this morning.
So a trip to the bank and a new bank access card and a fill a minute after the opening bell. I did o.k. but I could have gotten more if I waited another two minutes. I also could have gotten less so I was just happy to be out and on with my day.
Here is how Boing was trading at 9:43 a.m. It did hit $4.70. Oh well, I was in this position for two minutes and twelve seconds on Thursday and one minute and fourteen seconds on Friday so I can't complain. ...... Can you play options on Friday afternoons that expire that day? Not really when the deadline to be out is 3:00 p.m. and not 4 4;00 p.m.? Why? Well in the last half hour of trade you will notice a wider spread in the bid and ask. Here is an example. Can you see the spread of .69 cents. That's crazy. It's a way of shutting down the trading making it near impossible to successfully trade end of the week positions. It's time really to get to the beach.

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

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slighty out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-mas...
Read more