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.

Boeing and Caterpillar on Jan 6th With the DJI up 700 Points.

First some background information. The three and one year charts on Boeing and Caterpillar.
Now the Caterpillar three and one year chart.
Both stocks have had amazing upward moves in the last ninety days. That means playing Calls correct? Look at Friday's Call option action. First Boeing.
The 205 Calls surged ten fold on the day. Now Caterpillar.
The 245 Calls also surged upwards.
Another ten fold increase. With the Caterpillar Calls above one could have purchased ten contracts at $300.00 and sold out at $4,900.00. Let's now look at the one day chart to see how this would be possible.
Buying into this position around 9:45 a.m. in hindsight was the time to get in.
The following few points might better put all of this into perspective. 1) Commenting on past events of what has just happened is not that difficult to do. It's like going to a rocket launch and describing what just happened. The compelling reason I write about situations like this is because they do happen. Boeing and Caterpillar, both strong stocks in recent times do sometimes charge up on Fridays and if your willing to throw some money into Call options on the very day they expire you sometimes can be handsomely rewarded. 2) What are the odds Of Boeing or Caterpillar going up eight dollars in one day? I would guess about ten times a year. What are the odds of a slight morning decline before a rebound back up on one of these days? I would say eight out ten times. What we witnessed wasn't that abnormal. It's a mix of playing the strenght of the markets and a stock in a strong short term uptrend. 3) Friday morning option trading on options that expire that day is a game very few play for obvious reasons but it is also a game some option players specialize in. 4) One techique option players sometimes use is to buy into option positions just before the close of the markets on Thursday and sell into the strenght of premarkets openings. It's a bet on the opening higher. Are tenfold option price increases exclusive to stocks like Boeing and Caterpillar? Not really. Look at Tesla on Friday. The same thing happened.
Take note. Over 65,000 option contracts traded in the series shown in one day. Profits potentially made could help pay for new Telsa cars. Trading in one day options isn't really a secret.


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