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Costco. It's Short Term Options

 Options on stocks in the $1,000  range often move  50%  or more in only a matter of  minutes on the opening on Wednesday and Thursday's . The trick is to  anticipate correctly which way the markets are going to move. That's a fools game you might say? Yes and no. It may not be a game you ever play but it might be something to consider to put in your bag of tricks when you are on a role. One thousand dollar stocks sometimes move five, ten or fifteen dollars on the day. If you have profits it's best to take them quickly. Costco is a prime example of that. Let's look at this mornings action. First it's five day and one day charts. Tuesday's trading was kind of choppy. Might it drop on the opening tomorrow? Here is a look at where the 1,035 series of Puts closed that expire this Friday. They closed at $8.50. It looks like Costco cycled up about five times yesterday. Given a weak market opening doesn't it stand to reason a three or four or five dollar will be i...
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How The Big Option Traders Made Money This Morning

In most of my blogs I poke around talking about speculating in options on five and ten stocks and sometimes talk about the action in Boeing or Caterpillar. It's all kind of introductory stuff. This blog is different, it's about Amazon, a stock that trades in the $3,500 price range per share. To rich for your blood you might say? I agree but that is where the action is for many of the sophicated option traders. It's big money chasing big rewards. Yet the basic premise of how things work remain the same. This week there are weekly jobless claims reports and the Institute for Supply Management readings on manufacturing activity for the prior month, amongst other reports. The first few days of any month are always busy days of economic reports.
Amazon sometimes exhibits the jitters and it can sometimes be blind sided by bad news. Bad news can send the stock down seventy five dollars in one day. Here is it's trading action yesterday. It gained $8.00 on the day but it was down $25.00 in the last two hours of trading. That's the jitters I am talking about, sellors getting out before the release of job loss/ gain numbers.
So hear we have a stock closing on a Wednesday at $3,479 per share. Would you have the guts to buy in just prior to Wednesday's close a Call option with a striking price of 3,500 which is $21.00 dollars "out-of-the-money" that expires in two trading days? Here is the series of option contracts I am talking about and here is where they closed. They closed at $11.20 a contract with over 31,000 Call option contracts trading on that series in one day! Then in the next the next printout I will show you what price they traded up to on the Thursday morning opening market. Look at how these options jumped up in price.
$11.20 to $19.55 just after the opening at 9:34 a.m. Amazon jumped up $22.00 on the opening. Some option traders trade in a different league.

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