Featured

The Sliding Door Syndrome - Hertz

 Open the door and guess what might happen? Who knows which way the winds will be blowing. The used auto car market got dumped on last week in the U.S, especially on tariffs new.  Trump said he might raise the tariffs on cars to more than 25%. It's a fickled  market. Here are a few of the sell offs. 1) Carvana Company. It sold off over $21.00 dollars on the day last Friday. They have a reputation for having share manipulations with a long history of  insider "buying-and selling-activities". They have a short interest of 5.3% . It didn't help much that the DJIA was down over 700 points on Friday. 2} Carmax also sold off on the week. They have an earnings report coming out and that could cause the stock to drop but maybe not. It could actually rally. Here is it's one week chart and a conference call dial in number. Listen to it if you like. I might be. Now here is a look at the 65 series of Calls on this stock that expire this coming Friday.  On Friday morning at ...
Post a Comment

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.

Comments

Post a Comment

Popular posts from this blog

Living on Kraft Dinner?

Image
What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
Read more

The Little Engine That Could

Image
Walmart again. It's all I seem to blog about. Here is it's five day chart. The stock keeps going up and the option series are set up in one dollar spreads. Even a fifty cent move on the stock moves the needle on these Calls. Look at how this series of Calls was trading yesterday at 3:00 p.m.. Now here is this same series of Calls just before noon today. Thirty days of upward action like this punctuated by the off day of decline. Now notice the higher volume of trading in the series of Calls with the higher striking price. These are the ones's with more leverage. At the same time look at the five day chart on Costco. The two stocks sometimes trade in tandem. Humpty dumpty sat on a wall .... a had a great fall. Someday soon a fall might happen but what a great ride it has been.
Read more

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slighty 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-mas...
Read more