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Trying To Make Costco Options Impossible To Play That Expire In One Day.

This was a special situation. A quarterly earning report coming out on the eve of one day options. With five days in every trading week the odds of that situation happening are only like twenty percent.  Some companies, more in tune with the potential for market manipulations will avoid earning report releases on Thursday afternoons for this very  reason. For some option players the event of  having one day options reacting to quarterly earning reports is like waiting for Christmas morning. Especially on stocks in the $1,000 dollar range. First the Puts on a Thursday morning at 9:52 a.m.. These are Puts which are $9.75 "out-of-the-money" with one day of trading life to go before they expire. Look at how crazy expensive they are. The stock would have to drop $21.00 in Thursday and Fridays trading just to break even. Earning reports will be coming out at 5:00 p.m. (on a Thursday - today) which is after the market closes. The fireworks will start in the next morning when the...
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Watch Boeing Jump On News

First some news as the markets opened. Horwmet Aerospace offered this sobering news.
Then good old Joe made this statement.
Now the opening chart.
When I see opening charts like this I always want to play it in the opposite direction. What was my take on all of this news. New contracts are great, people are flying again and ticket prices are up. It's all good but Boeing doesn't really need more deals and orders. They are still trying to get back on track. Would this morning bounce go away? I thought so, I jumped in on Puts.
In at 9:45 a.m., 9:48 a.m. and 9:50 a.m. . I was confident in what I was doing but the stock seemed to stay persistently high.
Then I got frustrated with how it was trading and bailed out.
I sold all four contracts at 10:42 a.m. at $2.61 per contract so I only made a touch. I was in this position for just under an hour and was starting to worry about a second wave of buying coming into this position.
This chart above illustrates how they jumped higher in price after I got out and the chart below shows how Boeing traded on the day.
In hindsight these Puts reached a high of $3.70 at 11:50 a.m. I also did a short chase of Boeing as it rebounded but once again didn't have the patience to stay with it. Here is what I did.
In at 11:51 a.m at $375.00 and out at 12:29 at $430.00. a period of time of 38 minutes. I left good money on the table. I went on to successfully trade Visa on the downside and got out of that position 3:59:21 p.m. The DJIA closed down 156 points on the day. Visa released this news after the markets opened this morning. It sounds ambitious but seems a touch risky.
* see my most recent blogs about playing Visa.

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