Will The Markets Top Out?
The Nasdaq Composite index closed up 4.7% on the week. the S&P 500 index, was up 3.6% and the D.J.I.A.was up 3%. Given the elevated volatility levels options have become extremely expensive to buy. Here for example is how Avis Budget traded on Friday. At one point in the day the 300 series of Calls traded as high as $15.43 on the day. The stock never traded much ovee the $302.00 range. What an exorbitant premium forming part of this equation. ........ Now look at the prices on this week's upcoming Calls and Puts. ... What happened to the old days of paying $5.00 or $6.00 for one week out options on stocks in this price range? Look at how Caterpillar jumped on the week on no real news? Up like $83.00 from it's low of the week back on a Monday. Here now is what a one week out just slightly "out-of-the-money" 790 series of Puts is trading at. That's not as bad as the premiums on Avis Budget but look at Caterpillar's thirty day chart. Actually the stoc...
