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Tesla - One Day Options. Not Your Typical Read

This blog is going to be a tough read because it tries to track Tesla's early morning option trading in the last day of trading in the October 18th 220 series of Tesla Calls. Critics of "one day" options are having a hayday in pointing out these "one-day-to expiring" options are a mockery to concept of sound financial investing. Here is Tesla's premarket trading price in the 220 series of Calls at 9:29 a.m. on Friday Oct. 18th. They are flat. Remember last Friday was an exceptional day for the Tesla stock with it being hit with a $21.14 drop on the day. Do today's traders remember this? Probably not. Why should they? It's a given this stock can be volatile. Option traders playing the downside last Friday on Telsa made out like bandits. Now it's 9:31 a.m.reading. Up only eleven cents. Option traders are in a period of time where they have to deal with early morning trading jitters. Is there a glimmer of hope that this stock might bounce up one
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Eli Lilly Calls With Four Days to Go.

This is a four day trading week starting with Tuesday. Monday was a holiday. Here is how the stock Eli Lilly traded on the last five days and in the last three months.
The stock is surging upwards (thanks to a new weight loss product) and the following Calls and Puts are very expensive. Here are Fridays closing prices on the 780 series Calls and Puts. First the Calls.The Calls cost $14.35 and the Puts cost $11.70. They only buy you four days of trading time.
Now here is a chart showing how the stock closed out the day.
Finally, here is how the 780 Calls and Puts closed the day.
So the stock lost $24.60 on the day. Note the" Open- Interest" on the Calls and Puts stayed the same from the previous day. What happened was "covered-Call-selling" in the morning, meaning as the stock tumbled it was a no brainer to be selling the Calls if you already owned the underlying stock and then buying them back at a profit later in the day. There was also some just outright "Put-buying" activities triggered in part by how quickly things were crumbling down in the late morning, also with the intentions of getting out before the end of the day. That's why the numbers of open interest activities ended up matching perfectly from the previous day. Most of this would be "programmed-buying" triggered in part by a general sell off of the markets in their entirety. What proof do I have that this is what went down? Well look at this early morning action.
Well 139 Put options where opened by 9:41 a.m. followed by
a volume of 157 Puts at 9:47 a.m. What this means is that in the first 17 minutes of trading,traders were nibling gingerly at this action. After that another 1442 contracts traded on the day or 721 "in-and-out" Puts transactions. It took the first fifteen minutes of trading to prove that a general freefall in the markets was about to happen. Telsa was down $6.19 on the day, Caterpillar was down $8.17 and Snowflake down $10.23. It was just one of those days were the high flyers got picked on. The small "retail players" didn't catch any of this action because at the start of the day both the Puts and the Calls were simply to expensive to play. "Covered Call writing" is a strategy that the "little sharks" can't afford to do.

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