One Week Options. Are They A Good Bet In Times like This?

Look at how these these four stocks traded last week. 1) What a great week for one week Call option players on Boeing even though the stock ended up down .83 cents on the week. 2) Roku. Roku hasn't yet recovered from a not so good quarterly report. Roku lost $1.13 on the week. (Netflix in somewhat the same space was up $35.780.) 3) Disney suprised. I talked about that in a recent blog. 4) Now Caterpillar. It was up $12.83 Now The D.J.I. was down .11% or basically flat. In good times Call options can be your best friend. To be continued.

Boeing Lays of 2,000 Employees. That's Good News Right?

It should be good news but I made the mistake of buying in to soon. If you read to the end of this blog you might say so much work and risk for next to nothing. I understand why you might think that way. I bought Boeing Calls to soon. I bought them last Friday in the early afternoon and I must have being day dreaming about past trades. Why not wait until 3:59 p.m. to buy in "at-market"? Sometimes I don't follow my own self imposed rules. That's option trading.
Here is what I did.
At 1:43:00 p.m.I bought two Boeing 212.50 Calls at $1.59 each. That's way "out-of-the-money" but it bought me time to the end of next week. Can you see how the stock dropped off late in the afternoon after I got in causing me to lose about 35% of my investment before the closing bell. The thinking was I was bullish on Boeing and was hoping something good would happen over the weekend. Maybe Barrons doing a feature article saying it's time to buy. It didn't, so on Monday morning I was offside on my holding. I then bought one more contract hoping to "average-down". I bought one piddly little contract, the same 212.50 Boeing Calls now trading at $86.00 dollars. Can you see now why the first two contracts I bought were becoming a worry?
Suddenly my "tip-of-the-ice" forte turned into a $400.00 U.S. sink hole. Then I quickly saw bids of $1.50 for my $86.00 dollar option on that same day, a Monday and I opted not to take it. If I sold everything I would still be down. So what happened next? The news came out about this 2,000 office layoff. It was not the guys on the shop floor who were slaving away making the companies products who were getting layed off but the paper pushers above them. Efficiency rules the day, so that was good news. So here now is where I was this Tuesday morning coming into the opening market. I just wanted to get my money out. I was stuck in a losing "out-of-the-money" Call position. I knew that if things started to go the wrong way I would loss all my money. I had an appointment at noon and would be unavailable to watch it the rest of the afternoon. Boeing popped two dollars in the premarket. I placed a sell ticket in the premarkets but then never ended up getting a fill. Apparently my asking price was set to high. I am usually pretty good at guessing right. In any event I got out just after the opening and made a small profit. I just wanted by money back. I can attribute the move upward to Boeing's random release of the news of layoffs. Boeing is not usually big on news releases like this. Last week there was also news about Boeing working on building better bonds with Indian. One of their directors was talking of more news on that to happen. That news didn't do very much. I guess China and Indian are not places that investors want more exposure to. Here is what the chart was starting to look like going into the lunch hour. I got out at as you can see on my ticket.
So here is my sell ticket.I got out at 9:59 a.m., three at $1.74:67 each. I got my money back out. I don't know what the extra :67 cents on my sell ticket was all about.
Once out I jumped back in again as Boeing slipped a touch ( I never got the full bounce on the opening ) but this time I puchased exactly one hour later the 210 Calls and not the 212.50 Calls to get a quicker kick. I got out shortly after just so I could be off to an appointment. Here is a printout of that litte trade. In at $308:00 and out at $370.00.
Now the bad news. Boeing went on to jump almost eight dollars on the day. Look at the chart.
Here is how the $210.00 Calls closed the day.
Here is how the $212.50 Calls closed the day.
Here now is what the five day chart looks like.
I missed a big move.Tomorrow is another day. Yes this kind of stuff really happens. * Barron's cover page on the weekend was about Pfizer's future with the wording "Why the stock is a Buy". Here is how it traded on Monday and Tuesday. Drug stocks are difficult to play.


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