CAT Puts

Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slightly out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-ma...

I talked about U.S. Steel on August 20th. It is a company 122 years old. There were takeover talks back in August with multiple suitors. It was just a question as to when the cards would unfold. Now this news which caused the stock to jump in price. (It's a complicated business to follow with big players all over the world involved). Is the Blackberry spin out story which I have recently blogged about an animal with the same outlook? That's something I still can't decide. Maybe it's one to watch.

Stocks like "Ford" in the ten dollar range can suprise. "Ford" is actually at twelve dollar U.S. however that is close enough. A move of like forty or fifty cents in a one day rally or a one day sell off can really can move the needle on Call or Put options that expire that day. I have witnessed two cent options ($2.00) options on "Ford" jump to fifty cent ($50.00 options) in two or three hours. It happens more often than you might think. So what happened on Friday this week with the "Ford" 12 series of Calls and Puts. Let me walk you through some of the action, or lack thereof. I will start with the five day chart of Ford a few minutes into the Friday morning trading session. Can you see Ford starting off with a little dip? Now the early morning 12 series of Calls, nineteen minutes into the action. Ford is down and this series of Calls are "out-of-the-money" Could the stock rally? The stock is down 15 cents on the opening and the 12 s...

This observation totally defies logic. The markets go up somes days and down some days. It's something like 50:50 right? How do you explain this? Here is how Caterpillar traded on Thursday Dec. 14th. Yes Caterpillar is on a role. It is up 14 of the last 15 days. Now here is the only news I could find on it this morning. This isn't really news because it's dividend was never really in question. Come to think of it, it's really bad news given that earnings were up strongly in the last quarter. Why isn't the company sharing it's profits? Is it buying back shares? Now here is a chart from September showing how Caterpillar gave up a gain on a Friday. It could happen again? So now what? Look at this. It's the 285 Puts on the close today with only one day to go. Look at the open interest. ZERO! Look how cheap they are. Couldn't the stock retrace half of it's gain? Why aren't traders looking at this? Even if I am wrong I find it so strange that t...

I spoke about Walmart in my Santa Clause bog two blogs back. Here is what happened today. Let's start at 2:30 p.m. and look at the 150 Walmart Calls which expire at the end of the week with three full trading days still to go. Now 33 minutes later. Then this happened.. Then. They closed at $1.98:00 That's not a bad move in 90 minutes. One Comment. People fear trading short term options. It's Tuesday and time value (the lenght of time it has unit it expires) was not an issue to have to think about. In some ways short term options is the best game in town. **** Did the rally carry over into Wednesday? Yes and no. Look at the high on the opening. It did pop. The path forward is now not as clear.*** What happened the next day? There was a slight uptick on the opening. You would of had to be quick to get out near the top. Here is how they closed the day. I don't like this chart as much as the chart from the previous day. *** Call me timid. The stock and the optio...