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What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
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Walmart Shines on Earnings Reports

Look at this chart.
It's the five day chart on Walmart leading into this morning's opening bell. Walmart releases it's second quarter eanings report before the opening bell. But wait, look at this chart.This wasn't that long ago. Walmart at times can stumble. Do consumers, hit by inflation have money to spend?
Now also look at this one.
My point is that if you guess the wrong way on Walmart you will get burnt. So now how are the cards stacked up this morning waiting for this earnings report? Here is a look at two close to the money Calls and Puts.
So here is what happened about twenty minutes after the opening bell.
The Puts got obliterated. The real winners were all the Call option purchasers who got in a few days ago. Here is how this option series closed the day.
Why did happen this way? In a way Walmart's results act as a barometer of how the U.S. economy is doing. It's mainstream in a different way than Costco. Opportunities to make a judgement call like this happen four times a year.

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