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What A Week For Market Swings. This Time Boeing

My last two blogs have focused on options expiring on Mondays and Wednesdays. This blog on a Thursday deals with options that expire tomorrow on Friday. AS A GENERAL RULE PURCHASING CALLS ON A THURSDAY MORNING THAT EXPIRE THE VERY NEXT DAY IS NOT A SMART MOVE TO MAKE. We have witnessed huge daily price swings this week where profits from option trading can be made in a matter of hours. Now let's look at Boeing's morning action. Sometimes when you see charts like this and if you're coming off a streak of three or four profitable trades it's best to jump in hoping for a reversal to the upside and ask questions later. Especially when the D.J.I.A is strongly up in price as it was. I quickly looked around and couldn't find any news to account for this price drop. Trumph was in China and we later learned that there was talk of China ordering 200 more of Boeing's new airplanes. China is always going to want more airplanes. Talk like this is only talk. Now this at 9:51...
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The Trade of the Year

It's not that complicated however it kind of slipped under the radar. It was a big name company we all know called Lowes. The payoff was wild. What are we looking at? Options that closed on Thursday at ten cents a contract and opened at one cent the folling morning, a Friday which then then hit an interday high of one dollar and fifty cents. A one thousand dollar investment would have went as high as $150,000.00. Folks, all of this is legal and anyone can play it. You could have made it all by lunchtime.
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What happened? Well we are talking about the 200 series on Calls that expired yesterday on Friday July 23th. At the start of the trding session they were over $3.00 "out-of-the money. Very few traders saw value in them. Yet Lowes did close strong on Thursday the day before it. Then it wobbled a touch on the Friday opening and resumed it's upward charge. The price of lumber is dropping and many people are waiting to purchase lumber at these new lowering prices. The kicker is that four dollar moves on stocks in the two hundred dollar price range in one day happen more often than you think. This was the trade of the year! **Buying options on a stock two dollars out-of-the-money on the last day of the life of a series of Calls or Puts is difficult to . I looked the Lowes 200 Put series at 1:53 p.m. and wondered if going in the opposite way offered an opportunity but opted not to play it. Here is what I saw. They ended up expiring worthless.
In my opinion, Friday morning Call options which expire that day (meaning in the ten minutes or so of trading) sometimes offer interesting trading opportunities as you are catching the fresh winds of morning exuberance.

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