As I write this blog I think about the Oct 20th blog posted called "X-mas Came Early To Ford Call Holders". When strange trading days happen they stick in your mind. Another blog I wrote on March 11th 2021 talked about Boeing going up $35.00 in one week. That was also a strange occurance. Today's trading was one of those days. Why, well one of the biggest one day drops so far this year happened. The DJI dropped 981 points dragging down most stocks including Caterpillar. Today was a Friday.
At 9:38 a.m. this morning here is what the markets were doing. No one at this point in the days trading was thinking that the markets might sell off almost one thousand points on the day.
Here is a five day chart on Caterpillar as of 1:30 p.m. on Friday afternoon.
Here finally is how the stock Caterpillar traded on the entire day. Look at how there was an additional ten dollar drop in the stocks price in the last 2.5 hours of trading. That's when the markets really started to turn super ugly. Note how the 230 series of Puts reacted on the day. It was wild.
As shown above the 230 Puts soared up in price and other "out-of-the-money" series went up even more than that. The stock went into a freefall as did other stocks like Deere which I tend to watch. Here now directly below are charts of the 220 and 217.50 series of Puts.
Imagine a two dollar investment going up to four hundred and thirty four dollars or a one dollar investment going up to two hundred dollars! It was all there. A 9:48 a.m. this morning I happened to check on the 420 Puts and this was the printout that popped up. Only thirty contracts traded Caterpillar was only down $4.20 on the day. Other stocks I was watching were in the same boat but it wasn't a panic. The 420 mark when I looked a the screen was still a little bit away but it wasn't totally out of the question. It didn't have the feel of panic selling.
Its humbling and it has me wondering why more computerized trading platforms did not kick in to capitalize on this free-falling adventure. Today was a day of unabated revenge. The usual levers of market capitalism were turned off. It will be interesting to read over the next few days how all of this will be explained away. It's also easy to understand how retiring investment advisors sometimes times turn to activities like planting blueberry bushes. Let this blog be a wake up call. Pick your battles and learn too walk away when the uncertainties of the markets become to overwhelming to figure out. There will always be better trading days with endless opportunities ahead.
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