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If a Stock Drops 10% In One Day Can You Play It For A Two day Rebound?

Here it is. Here are the 240 series of Calls that expire in two days. $565.00 U.S. is a lot of money to shell out as an experiment. Now this. The next days action. Half of this options life has now disappeared. Now a look at its five day chart which tells a different story. I don't like chart charts that look like they are languishing sideways. This one does. Analysis explained this drop away under the guise of "macro shift's" happening within the industry, not company specific reasons. With just one trading day left I would get out. Hanging in is to big a gamble. Wednesday's index loss was almost 500 points and today's action was an across the board market rebound. Get out and start tomorrow with a clear head. Read my previous blog on Pfizer options which also traded during the same time period.
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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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