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$Caterpillar Calls On A Day The Stock Goes Up $41.00.

Let's start with it's five day chart. Today is Thursday. Here is what the DJIA did on the day. Here is what it's "near-to-the-money" Calls did. What stands out to me? Only 37 contracts traded and an open interest in this series of Calls of 36. This series of Call options expire tomorrow. What about the next week out Call options with the same striking price? How did they trade? It's unusual to have a higher open interest number. What about the longer term Call options, the ones thae expire near the end of July?. There is no real interest in them. What about the "near-to-the-money" Puts that expire tomorrow? Once again the action in them is next to nothing. If the stock gives up half of what it gained today these Puts would triple in value in one day. Now here is Caterpillars "year-to-date" chart. Holding one day to expiring or one week to expiring Call or Put options on stocks like this in the $900.00 price range attracts little in ...
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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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