One Week Options. Are They A Good Bet In Times like This?

Look at how these these four stocks traded last week. 1) What a great week for one week Call option players on Boeing even though the stock ended up down .83 cents on the week. 2) Roku. Roku hasn't yet recovered from a not so good quarterly report. Roku lost $1.13 on the week. (Netflix in somewhat the same space was up $35.780.) 3) Disney suprised. I talked about that in a recent blog. 4) Now Caterpillar. It was up $12.83 Now The D.J.I. was down .11% or basically flat. In good times Call options can be your best friend. To be continued.

Boeing Down $20.00 or 8.03% On A Monday Morning

Don't buy in, it's going to be a struggle.There is going to be too much guessing in-the-air in the near term.
What happened? A door hinge problem or something. I am suprised with the millions of miles their planes fly filled with with all kinds of heavy things they don't loose wheels, wings and windshields. $400.00 dollars will now buy you a option contract on a 230 Call which will expire this Friday. That means the stock will have to rebound $5.00 just to get your money back. It might however there is nothing tangable to say it will. I don't like those kind of trades. So many pundents will now be commenting on what has now happened until we are tired of hearing about it. Let's just watch the action and see what happens. Now here is what happened on the next day.
Can you see how these options have now dropped half price? That's what I wanted to avoid. Now is it time to try and rethink this position? If your still thinking about the upside it's still a high risk. Playing this game is not the space you want to be in. Now Wednesday's action. Notice where the 230 seies of Calls closed? Can you see how it was best you just stayed away? What happens tomorrow is anyone's guess after having inflicting a few days of downward pain.
Here is how the stock went up $2.00 in one day and the Call options didn't do anything. This is because the remaining life of the option was shortened. Lets now look back to the end of the trading session on Monday after the crash. Only 122 contracts were open at the end of the day after a wild day of trading. Traders know the second day after a crash can be another bad day as people slow to reacting to bad news will be slow in getting out. Look at what is happening to the open interest numbers at the end of day on Tuesday and Wednesday (shown above) as more trader's hope for a rebound. Once again this could be a trap. It's best just to stay away, even if this advice proves to be a bad call. Why bet on something with two days to go? To be continued. Thursday. No rebound. Look at how theses Calls got crushed. (This time I am showing a series of Calls with striking price five dollars higher.They really got crushed).
** Friday morning Jan 12th. Anything could still happen. Here is an early morning reading on the Boeing 220 Calls that expire today. These are a series priced ten dollars lower than the series of Calls we first started watching and the ones that would benefit the most from any kind of rebound.
Notice the open interest and the volume of trades are next to nothing. Option traders are still not willing buy into this as being as being a point of reversal. These Calls also ended up expiring worthless. Yes option trading is a wild and speculative game however option traders in this case are exercising some caution. That's a good thing. Here now is how it traded out the week. It dropped again on Friday.
Boeing was down $31.30 on the week and regulators grounded the 737MAX. ***When did Boeing come back up? Here is the answer. It jumped $8.55 in one day nine calendar days later on a Wednesday.


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