CAT Puts

This is a short blog full of twists. Try to get through it. First a five day chart of Pfizer. chart. In the past week it was up $1.05 and it was the 7th most activity traded stock on the NYSE most active list. It's in a breakout mode. Look at how it traded over the last three years. This breakout mode might last a few days, weeks or months. This stock has a history of moving somewhat slower than most stocks. A second quarter earnings report comes out July 30th. If it's good that could add a touch to the stock's price. Now this. As a general rule stocks and options on stocks in this particular price range are difficult to play and in this case everyone is following the same story. Fred down the street and John around the corner and Mark across town are all dialed into the same commentary. There is nothing that really gives you an edge when it comes to playing it. That's the problem. Here now is a look at the Pfizer "next-week-out" $30.00 series of Call optio

Might a stock rebound a touch after a $100.00 a share drop in price in only two days? Eli Lilly got hit hard on Wednesday. It got hit again on Thursday as it dropped another $56.69 dollars! Going into the Friday morning session wouldn't you expect a bit of a rebound? Afterall, Eli Lilly has had an impressive run upwards on exceptonal earnings. The stock is solid but has hit some bad news. In a way this news really just a rehash of old news. Good writers can spin out little articles like this. Take them with a grain of salt. Let's now look at the action in Eli Lilly's most recent five day chart. Let's focus on how the 850 series of Calls that expire the next day closed out the day on Thursday. That's what most option traders would be focusing on going into Friday mornings trading. They closed at $20.50 per contract which means that the stock would have trade up by $20.15 to the $870.50 mark for the 850 series of Calls just to break even in one day. What a strange s

First, here is what the markets did today. Now this.Look at the high and low on these options today. All Call option holders were rewarded beyond belief. These are the moves option players dream of. It's instituational money flexing their muscle. This also. This too. Now what? You can't fight it and you can't buy in. Deere also is having a nice five day run. It's not that anything special is happening with these two companies. Eight days ago in a blog I gave the example of how I bought a "330" series of Caterpillar Calls for two hundred and fifty five dollars. Had I bought the 330 series of Calls at that time with one more week of trading life in them they would have cost about $450.00 dollars. Today they would be worth over $3,200.00. This is not rocket scientist stuff. It is just something that has happened.

An observation. Playing stocks in the under five dollar range is ok if you have time to wait. When it comes to playing options on them you should look to take a two-to-four months out stance. Few option traders play options on stocks in this price range. I do and in these kind of markets as of late the two-to-four month period of time can be shortened up a little. What's sometimes is usefull is to watch three or four stocks in the same sector concurrently to spot a trend. Now look at these charts. They are all in different industries. Now here is a chart of a stock that was $5.00 like a week ago. What happened and what do they do? They make batteries for Electric vehicles and they just made a deal with V.W. Remember a few weeks back V.W made a deal with Rivean and their stock is jumping up. Now here is another stock doing something a little bit different. They are building a hydrogen/electric powered air taxi with vertical liftoffs and they have recorded a 523 mile flight. Here i

Quickly check out these six different five day charts amd look for a common theme. Talk about a game of snakes and ladders! Was there a theme to the price movements of most of these stocks? Yes, with most of these stocks, the directional moves that happened on Thursday continued on over into Friday. Looking for one day reversals on stocks on Thurday afternoons and also going into Friday would have being a mistake. We are enjoying strong markets and this is the outcome of strong markets.These are not normal times.