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Showing posts from January, 2024

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Why Tuesdays Around 11:30 A.M . Are Particularly Unattractive Times To Be Looking At Options That Expire On Friday

So here are nine examples of what the heading is alluding too. Bad times for the most part to be entering into option positions. 1) Tesla. 2) 3) 4) 5) 6) 7) 9) 8) Now the closing reading on these Calls at the end of the trading session. $6.20 is down from $8.03 on Tesla and on First Solar the Calls are $3.10 down from $3.35. Here is what the markets did on the day. So let's continue on. Now Elli Lilly and Caterpillar. Elli Lilly went from $13.40 to $15.65 and Caterpillar went from $3.95 to bid $3.95 and $4.35. Now Biogen. It went from $2.50. down to $1.45. Boeing Calls went from $2.88 to $3.70. In Biogen there were no further option trades on the day with the bid and ask going up towards the closing bell. Walmart couldn't do anything as the effect of this tariff situation is all new. When is food going to cost more? It's Calls went from $.88 dollars to $.75 dollars. Now the last one, Home Depot. $3.80 went to $4.30 So really the markets sold of or went side...
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Setting up Caterpillar Puts For A Try On The Downside. If A Stock Is In An Uptrend It's Not A Very Bright Idea.

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Last week we tracked Caterpillar for it's entire week. This is a new week.  This time I will be suggesting it's  time to try an "in-and-out" 15 minute trade.  If my reasonings turn out to be are wrong, they could be, I will try to explain what happened. Here is what what the markets are doing at the close on Monday. Now here is the five day chart on Caterpillar.  Now the one day chart. Are you able to see the strength coming into the stock near the closing? Sideways most of the afternoon until the last hour. Strength coming into it on the closing.   What's going to happen on the opening tomorrow? Well it's going to be a play more on how the market is going to open than a play on Caterpillar itself. Look now at these three series of Puts. Which one is better to be considering? Look at the open interest at the end of the day in the 300 Puts with 171 open contracts. With the 302.50 Puts the  open interest is 342 contracts and with the 305.00 Puts the open inte...
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A Test To See How Smart Short Term Tesla Option Traders Are.

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This is a unique opportunity to observe something which could shed some light on how smart Telsa option players really are. Telsa crashed on an earnings report release and short term option players were given a unique opportunity to speculate on a one day Friday rebound. Alternatively, a second option they were offered was to speculate on a further one day (Friday) decline caused by "late-to-the-party" investors wanting to get out of this news before things got even worse. YouTube videos scream a crash is coming in EV sales. It's one of those occassions where the earnings were actually pretty solid but where analyst set their expectations slightly higher. First a one day look at how Telsa traded on Jan 25th, 2024. It was down a chunk. When I say down a chunk it was down 12% in one day. Here are two short articles to better explain this action. So what is the "Let's See How Smart the Telsa Short Term Option Traders" is caption all about? Well it all has t...
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Caterpillar on a Monday Morning At The Start of the Week

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When a stock pops on a Monday morning can you go against it? That is a logical question to ask. Here is Caterpillar on the opening. It's an interesting chart because it is hitting a resistance level. What do your instincts tell you to do? Here is a look at the Puts and Calls. Now the Puts. Yes there is more action in the Calls, there always is. Both look pretty inexpensive given the recent volatitity in the stock's price. Now consider this. Caterpillar is the largest manufacturer of heavy equipment in the world. Why are the open interest numbers of "near-to-the money" options on it so low? One of the reasons is that the stock is mostly owned by institutions who make buying and selling decisions based on more sophicated tracking tools than what are made available to retail traders. Retail investors/traders, in my opinion are to some degree handicapped for this reason and option trading on this stock is always more of a gamble than it is on other stocka like Telsa f...
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January Blues and News on Taiga- The Opportunity to Tap Into 90 Dealerships

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Here is the list of auto stocks I watch. All are down this morning. It's difficult to think about playing the upside. It's also difficult to play the downside. Caterpillar is struggling. It dropped today. Analyst are always busy looking in their rear view mirrors to explain what is happening. They now say that Caterpillar is exposed to the slowdown in China. That's not really a fair assessment of the overall big picture. It recently had a nice run up. Boeing is entering into a cup formation. Moderna was $86.00 back at Christmas and jumped to $115.00 on Jan 8th only now to settle back down again to $96.00. Then there is Nio an Ev maker. They are expanding their sales into Europe. I often talk about this stock as it trades in very high volumes and has a huge following . A few years back it traded five times higher in price than it does now. It's product line is now much improved. The stock however is now crashing. There seems to be to much focus on monthly production ...
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Barron's Says

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" Not much has changed for the power grid over the past couple of decades. The U.S. consumed about 4.2 trillion kilowatt-hours of electricity in 2022, a record, but overall demand has been sluggish - just 0.4% growth annually since 2000. About 60% of that comes from burning coal and natural gas. Another 20% comes from nuclear power, with another 20% from renewable sources..... Right now EVs account for less than 1% of total electricity demand.... All told, electricity use could grow by 2% over the next decade.... Production will also be increasingly decentralized. Utilities will still generate the bulk of the electricity, but it will also come from a Walmart store with a solar roof, a Telsa owner with a backup battery, or a homeowner with a standby generator." Telsa had a bad week for trading. Here is it's five day chart. Telsa was down $18.60 on the week or 7.8%. It's getting to have a million pieces to the puzzle, with this week news of price drops in China and pro...
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