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Tesla - One Day Options. Not Your Typical Read

This blog is going to be a tough read because it tries to track Tesla's early morning option trading in the last day of trading in the October 18th 220 series of Tesla Calls. Critics of "one day" options are having a hayday in pointing out these "one-day-to expiring" options are a mockery to concept of sound financial investing. Here is Tesla's premarket trading price in the 220 series of Calls at 9:29 a.m. on Friday Oct. 18th. They are flat. Remember last Friday was an exceptional day for the Tesla stock with it being hit with a $21.14 drop on the day. Do today's traders remember this? Probably not. Why should they? It's a given this stock can be volatile. Option traders playing the downside last Friday on Telsa made out like bandits. Now it's 9:31 a.m.reading. Up only eleven cents. Option traders are in a period of time where they have to deal with early morning trading jitters. Is there a glimmer of hope that this stock might bounce up one
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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.
Location: 4QMPH9W3+VX

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