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Day Trading One Month Out Options. Learning To Skim The Tiniest Of Moves

This blog is different. It's about skimming small profits on one type of option in particular. It's also my story about how to make the time value of "one-month-out" options your very best friend. What I am about to try to describe to you is a phenomenon of wrongly calculated time values built into option pricings. Wrongly calculated from the perspective that some option prices (their "bids and asks") are over-sensitive to the tiniest of pricing swings. Who am I to make claims like this? What credentials do I bring to the table? I don't want to tell you as I want to keep my identity a secret. Let's just say that I have being trading options for a long time. Over the years I have learned that "nine month" or "one year out" Call options or Put options on stock's in the ten dollar price range are often mispriced. As example, I have followed the stock "Ford" for like forty years and to me it's January Call options a...
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Can You Catch Ford Struggling On A Thursday After A week of Negative Talk About Excess EV Inventory? Then there Was News

First the five day chart and a Thursday morning early trading chart. Timing is everything.
Is a jump upwards by tomorrow possible or a slight rebound in the next few hours or into the early afternoon? It's really the next ninety minutes of trading which could be a sweet spot.
To be continued. It's now just after 11:30 a.m. Can you see the bid and ask are up?
Now Ford around 1:52 p.m. The market is softening up. Now would be a good time to get out and call it a day.
In at .21 and out at .28. Do it on a trade size of 50, 75 or 100 contracts. It's not much of a gain however its a gain in U.S. money and it was a play on an oversold morning situation. A lagging stock in a strong market. There were small spikes around noon as news came out.
We will check back later to see what happened to this series on the closing. Hanging onto these Calls going into the last day of trading is not a smart thing to do.
Look at how wide the bid and ask are now at the closing. The market makers are trying to give themselves some protection in case the markets pop on the Friday opening. Anything could happen tomorow. **** Payroll numbers came out on Friday morning. The markets are up. Anyone with guts who banked on an opening rally in the Ford Call options we where watching did well.
Also note a low on the opening of .18 cents. What's that all about? Someone had an order in for a premarket trade. That's a topic for another day.+++++++++ Now let's jump ahead to the end of the trading session on the following week. It's Monday was a holiday.
Same old game and Ford has only moved ten cents on week! That explains why the option interest numbers are down by half. Fewer traders than last week are thinking about Calls.

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