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Lucid

What do you think about this chart? It's a Thursday morning and it looks like this stock is kind of in a downdraft. Look at my most recent blog on Rivian. The bad news on Lucid could be a hangover effect caused by Rivan's one day prior bad news. Let's now look at two series of Lucid's Calls which expire tomorrow. We now find ourselves forty one minutes into the market's opening. ... Now this. The stock is down twelve cents. Now a small rebound twenty five minutes later. .. The $.22 Cent $5.50 Calls are now $.30 and the $6.00 series of Calls have jumped from $.03 Cents to $.06 Cents. All of this has happened in the first forty minutes of trading.Take your money and run. Dips on the opening sometimes rebound quickly. We saw that with our Monday morning blog on Nike. Here is how Rivian closed out the day. Always take profits on Thurday morning options if you got in just after the opening on next day to expiring options if you are able to cash out in the first for...
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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 it's 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 were up over 400%.
Wow. It was a crazy gain. Now part two. Let's go on a few days to see what is happening.
Here now is how it finished out the week.
Timing was everything.

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