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What To Focus On - Part Two

My blog of November 27th was entitled "What to Focus On". Please read it. This week we are feeling a bit of a hangover. Last's weeks triple witching event is over. Stocks that were forced to contract in price to sqeeze out spectatate positions on them are now free to resume there old trading patterns. This Monday morning at 10:20 a.m. the Djia is up 301 points. There are also losers. So now what? Mark on your calendar exactly three months down the road how the markets traded on the first morning after one of these triple witching events and use this same logic to catch the upside on the next "hangeover" day like this. How do you pick the winners? Find a few stocks that have enjoyed a recent upswing and play them to pop on the first trading session after one of these events. This blog is just an observation.

Attention Spans and Retention Abilities

What's your attention span for reading these blogs? Most readers will decide in two or three seconds if they want to read this blog. If this blog was called "Boeing Calls" for example red flags would instantenously be raised. Most readers would have a longer attention span for blogs called Disney Calls, Mcdonald Calls or U.S. Steel Calls. Why? Well casual relationship are easilier to understand. Disney must be hurting with the covid thing, Mcdonalds still has their their drivethrough business and U.S. Steel might benefit when it gets through this rough patch of poor auto sales. People are attracted to things that might go up or down for logical reasons. If your still reading this blog I congratuate you. Many readers would have clicked off by now looking for more instant gratifications. Most option players shy away from playing Boeing Calls knowing that there are an infinite number of variables that can send it shooting up and down. I get that. I like playing options on Friday, option contracts that expire that day. Last Friday morning I bought Mcdonald Puts and was up 300% on my money in 25 minutes only to then watch it melt away and expire worthless. My point is that Friday swings can be extremely rewarding. Boeing opened lower this morning causing a selloff in the 192.50 Calls.
Look at what the 192.50 Calls traded down to. They went down to 20 cents or twenty dollars a contract. Then the stock rebounded over four dollars a share in thirty minutes!
At 9:59 a.m. they were bid .39 - ask .44 having hit a low of .20 just seconds below when the stock seemed to be in a freefall. The four dollar stock increase was magical. Look at what they were trading at by 11:12 a.m. In thirteen minutes they more than tripled in price and look at how the volume of trading went up more than 400%.
As an option trader I like to be out of my positions by noon on Fridays. It's just something I do. Here now is it's closing readings for the day showing how high these options traded up to at one point in the day and where they ended up closing. They went as high as $2.53 a contract.
Yes it would hve taken guts to buy into this one on the morning dip. Yet some Friday option players know that the day is still early in the first hour of trading. Nearly anything can happen.

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