May 2nd. I want you to look at the insignificant amount of open interest Call positions on Caterpillar this Monday morning.
There is not much going on and the markets are relatively flat.
Retail option players are for the most part burnt out from the craziness of the markets over the last month. The open interest in the Puts is slightly larger than the open interest in the Calls. Most of the time the reverse is true but these numbers are relatively low. Now let's look at Boeing. Are you able to see something strange happening in one of these three series of Puts? It has to do with the "open interest" numbers. The 144 Puts and 146 Puts have little trading but the 145 Puts are on fire.
Notice the high volume of the 145 series of Puts trading. What's going on? Is this going to be an in-and-out trade that lasts only a few hours? Is it based on technical analysis or insider knowledge? It's only affecting one series of Puts. It makes you wonder and we will have to wait until the next trading session to see if these positions remain open. I didn't catch the exact time when the volume poured into these Puts. This printout is at 11:26 a.m. and Boeing topped out around 9:45 a.m.. If you look carefully on the chart below it shows all the buying of Puts happening at 9:45 a.m. so someone timed a buy-in perfectly. It also shows three spikes when they got out starting around 11:30 a.m. Here is how Boeing traded on the day and where this 145 series of Puts ended up closing.
The question now is what will be the open interest in this series showing up on the opening tomorrow? Did these traders get out? I won't be able to tell until tomorrow. Here now is how "Yahoo" on their business pages reported today's action. The first printout was at 1:23 p.m. and the second was at the end of the day.
What's going on with the 145 Puts? I still wonder. No clues of unusual activity was happening with the offsetting 144, 145 or 146 Calls.
Now for the Tuesday morning look at the open interest in the 145 Puts. The number has decreased down to 2,381. Somebody made out like bandits.
If you study the chart you can see why the 145 series made the most sense to play? It was "out-of-the-money" but just not "too-far-out" of the money. Well done. *How much was made"? Do the math. Let's say in at $275.00 and out at $4.00 times on 15,500 contracts means a profit of just over $1.95 million after putting in just over $4.2 million. Talk about swimming with sharks. Some sharks do it with ease. In and out on a Monday morning. How good is that!
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