Why Not To Buy Not Rivian Calls With Two Days to Go?

It's obvious right? If you mess up and the stock opens the wrong way you only have one day for a rebound. Why put yourself in that position? Others might be in the camp of saying why not go for a fifty percent rebound on Thurday's morning opening. The stock sold of on Wednesday on very little volume. A morning pop is possible. The stock has being strong as of late. Here is it's five day chart. Now this, the seventeen series of Calls that expires in two days. They do look cheap after hitting a high of $1.55 on the day. If we look at a 30 day chart we will see that the stock is still in an uptrend. Why not look at the Call options one and two weeks out? Here are the seventeen series of Calls one and two weeks out They would be much safer to play and I will check in on these ones at a later date. So what happened on the Thursday opening? Let's switch gears for a moment and look at how Roku, a much higher priced stock opened and look at how their Call options moved.

Caterpillar Calls. A Classic Trading Situation.

Early indications were that the markets were set to rally on Tuesday March 29th. Most of the stocks that is except for Caterpillar. I scurried around looking for news as to why Caterpillar was trading lower in the premarkets but couldn't find anything. Caterpillar, in spite of it's size often seems to trade in a bubble. It's movements up and down seem so random. Institutional shareholders move huge blocks of stock in very selective ways. Within only a few minutes of trading the markets were up strongly but Caterpillar was going in the opposite direction. When you look at it's opening chart below one would have to ask themselves if there would be any support at the $219.00 dollar price level. It's the falling knife syndrome. If you're looking for a reversal when do you buy in? With the markets so strong one would think it's only a matter of time before the stock stops falling.
Well look at the volume of trading on the 220 Caterpillar Call series (that expire this Friday) one minute into the trading session.
Now look where the stock traded down to at 10:00 a.m.
How did the Call options trade on it? Well first notice on the upper printout at 9:31 a.m.. At that time only two option contracts had traded on it. This tells us is that the interest in premarket trading was very low or next to nothing. That's somewhat suprising. In the absence of bad news, no one is really interested in trying to estimate how bad this news could be. Now let us look at how the stock continued to drop, showing the 220 Calls at 9:58 a.m. and then also earlier at 9:31 a.m.. Imagine the stock being down like $4.58 when then D.J.I was up over 300 points. But wait. Stocks do sometimes turn around. Look at the one day chart below on Catipillar showing how it ended up trading on the day and look at how the 217.50 and 220 Call series ended up closing ot the day.
Good money was made by option traders who timed their trading wisely.It wasn't a short term trade. It was four or five hour trade. We also note that Caterpillar continued to jump upwards the following morning.
I call it "A Classic Trading Situation" because Catipillar is known to trade upwards and downwards on no real news. All of this action never ends.


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