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A Real Look At Ford On The Opening Yesterday.

The stock opened down and jumped at 9:31 a.m. Look at this chart. In our last blog I followed the trading pattern of it's Calls all day. Had you placed a premarket, "at-market" ticket on the 12 series of Calls your guarented fill on the opening would have reflected the drop in the stocks price in the first few seconds of the opening. Somewhere between 9:30:00 a.m. and 9:30:59 a.m. the 12 series of Calls dropped in price to $.57. Then in the first five minutes of trading they rebounded to a high on the day of $.76. "At-market", "premarket" tickets in this instance would have guaranteed that you would be part of this action. The flip side of this logic is that there were no guarentees that the stock was going to go up. The use of "at-market" tickets on stocks in this price range with four days of trading life left in them should be included in your bag of tricks. Scarier is the use of this type of order on "last-day-to-expiring" opti...
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Toyota

Very few option contracts trade on Toyota. I have wondered why and offer one potential explanation. It's listed on multiple exchanges around the world and "option makers" in North America are basically just following the action. If the markets open stronger in North America that means Toyota traded stronger overnight on markets overseas. Secondly, the Calls and Puts trade in incriments of five dollars.There are for example 135 Calls, 140 Calls, 145 Calls. Having a five dollar spread wipes out the incentive try to daytrade option series which are soon to expire. If the stock moves from 142 to 143 the "bids and asks" on a 140 series of Calls might hardly change. It's not like trading the stock like Boeing where you can get in and out with option series set up in increments of $2.50 . Here is it's one month charts. The company now has a new C.E.O who is getting criticized for not moving to go electric quickly enough.
What I am now about to show you might discredit some of my above points. It's a five day chart on Toyota and look how all the action seems to happen on the opening. Why? It's the effect of overnight trading on other markets. Our North American trading follows Toyota's overseas market trading.
Now back to my point of how contracts trade. A volume of three and twelve contracts in the 140 Calls and Puts series that expire soon. Look at how wide apart the "bids and asks" are and how low the outstanding number of open contracts are. It's crazy.
Toyota is a great company. It's just not one that attracts option players.

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