Why Not To Buy Not Rivian Calls With Two Days to Go?

It's obvious right? If you mess up and the stock opens the wrong way you only have one day for a rebound. Why put yourself in that position? Others might be in the camp of saying why not go for a fifty percent rebound on Thurday's morning opening. The stock sold of on Wednesday on very little volume. A morning pop is possible. The stock has being strong as of late. Here is it's five day chart. Now this, the seventeen series of Calls that expires in two days. They do look cheap after hitting a high of $1.55 on the day. If we look at a 30 day chart we will see that the stock is still in an uptrend. Why not look at the Call options one and two weeks out? Here are the seventeen series of Calls one and two weeks out They would be much safer to play and I will check in on these ones at a later date. So what happened on the Thursday opening? Let's switch gears for a moment and look at how Roku, a much higher priced stock opened and look at how their Call options moved.

An Example of Call Options on Caterpillar Prior to an Earnings Release

Not all retail option traders are up to the challenge. What am I talking about? Caterpillar Calls just before an earnings release.This is a blogging site about Caterpillar Calls and Caterpillar Puts. The stock could have a huge jump if the earnings beat expectations or investors could be worried a recession looms. Look at both Caterpillars thirty day and five day charts.
Now look at what the 262.50 Calls are priced at which expire at the end of the week (August 4th).
Very few option traders are playing them. Normal in my opinion should be over 1,000 contracts in a series like this trading everyday and a few thousand open interest contracts. With global warming more heavy equipment will always be needed to rebuild our roads and bridges getting washed away by floods. That plus Caterpillar recently come to terms on their contract talks and supply chain issues are getting better. Did you see how Boeing jumped in price on it's earning report a few days back? Caterpillar could jump too. Here is Boeing's chart in reaction to thier earnings report.
These 262.50 Calls cost about $500.00 a contract to purchase which is to rich for many option players to buy into. I get that. I also understand that the stock is already up over $20.00 in the last month so some shareholders may be thinking of selling out on the release of good news. Looking at Boeing once again look at the open interest on it's slightly "out-of-the money" Calls that are to expire in five trading days.That to me is a normal volume of trading.
Why is there so much caution in the air? One reason is that if Caterpillar jumped five dollars on good news that wouldn't move the needle on it's Call options all that much. Maybe a 50 or 60% gain. Built into the options price is five days of time value which makes them somewhat expensive. What do I expect? I expect a gain. **August 1st. Here is their earnings report.
Let's check back in a day or two to see how the needle moved on this stock. It jumped. The 262.50 Calls well up over 400%.
Wow. It was a crazy gain. PART TWO Let's go on a few days to see what is happening.
Now here is how it finished the week.
Timing was everything.


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