CAT Puts

Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slightly out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-ma...

Read the previous blog first, about Exxon on Friday. The Puts on it's last day before they expire options increased in price in the last few hours of trading. So to did the Puts on Nexflix on that same afternoon. Can you see how it sold off six dollars in the morning trading session (the first chart below) only to rebound almost three dollars? Then the stock got tested again and this time it lost it's steam. Then what happened? Well here are the 470 Puts at 12:08 p.m. which expire at 3:00 p.m. The stock looks like it is trading in a channel downwards. See the chart below. What next? Yes the stock continued to drop approaching the 3:00 p.m. deadline/ expiracy time date. Now look at the same series of Puts at 2:12 p.m. They were trading at $490.00. Looks so easy right? Let's check out it's five day chart and it's year-to-date chart. Yes on Friday it looked like it wanted to roll over. * Two things. The reality of trading short options like this. Lock yourself in ...

With Exxon we are dealing with a well oiled, well orchestrated machine. Every drop of oil and every trading derivative monitoring the flow of money surrounding oil is tightly scrutinized. Don't try to trade options on Exxon on Fridays that expire that very same day. You will get shut down. Here is a case in point. But wait. I take it all back. None of that is true at all. Look at this one printout which tells us so much. At 12:08 p.m. here are the Exxon 104 Calls that expire for retail investors at 3:00 p.m. Look at how the contracts on the opening traded for under $.05 cents. It's noon and look at the profits which could have being made! A move of $.03 to $.37. Now here is the chart showing how Exxon traded on the day. Now look at what the 104 Puts were trading at at 12:08 p.m. Now this. Now it is time to change the title of this blog to How Exxon Didn't Close The Door On Option Traders Today. In fact, they left it wide open. Look at how Exxon dropped from 1:00 p.m. to...