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What To Focus On - Part Two

My blog of November 27th was entitled "What to Focus On". Please read it. This week we are feeling a bit of a hangover. Last's weeks triple witching event is over. Stocks that were forced to contract in price to sqeeze out spectatate positions on them are now free to resume there old trading patterns. This Monday morning at 10:20 a.m. the Djia is up 301 points. There are also losers. So now what? Mark on your calendar exactly three months down the road how the markets traded on the first morning after one of these triple witching events and use this same logic to catch the upside on the next "hangeover" day like this. How do you pick the winners? Find a few stocks that have enjoyed a recent upswing and play them to pop on the first trading session after one of these events. This blog is just an observation.

A Friday Rally

It happened. Telsa jumped on a Friday which is something remenicent of what it would do back in 2020. Here is an extreme example of how an "out-of-the-money" Call option jumped from obscurity to being worth lots of money at one point during the trading session on Friday..
There was a little bit of chatter about how Telsa raised some of their prices modestly this week and then the D.J.I. jumped over 500 points on Friday. So here now is where this blog gets a touch tangential. On the close on Thursday this Call option was eight dollars and eighty cents "out-of-the-money" and closed at $.10 or ten dollars a contract. Who would be stupid enough to be spending money on this type of a contract which would expire the next day with the probabities of a payoff being so negligibly small? Or are they? Sometimes when I see people driving new shiny Mustang convertables I wonder if they got them by purchasing Ford Calls on a Thursday with one day to go for $2,000 and selling them for $30,000 the next day after the stock jumped. With a Friday pop it happens more often than you might think. So Telsa jumped $8.86 on the day. Look once again at it's five day chart. Can you see how on Wednesday and Thursday it was trading in the $165.00 range? Given where it once was, wouldn't there be a good chance of a quick rebound of three or four or five dollar on Friday morning? If it did, then the ten dollar Call options would at least double or even triple in price. In this case these Calls dropped from ten dollars per contract down to one dollar a contract just after the opening before rebounding back up to a high of 83 dollars. On a different note, here now is how the 165 Telsa Calls did on the day and the Ford Calls.
Fridays with 500 point rallies are days to be savoured. * Shopify Calls were the lucky ones this week.

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