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Step Down Charts And Short Term Options. Nio

Here is a classic "step-down-chart" with one minute of daytime trading life left in them before the markets close at 4:00 p.m.. The stock is Nio. ... This printout of "in-the-money" Call option also shows one minute of trading life in them before the market closes. It's Tuesday and these Calls expire this coming Friday. You are purchasing three days of market trading life. To purchase one thousand shares of this stock would cost you $5,750.00. To purchase options that control the price movement of one thousad shares of this stock for three trading sessions would cost you $370.00. ( Ten contracts at $.37 each). These Calls are also currently $250.00 "in-the-money" which means if the stock totally goes flat for the next three days your options will still have that amount of intrinsic value left in them. Now think about this. Many option accounts in the U.S. enjoy free option trading and there are discount brokers in Canada who can save you money. A fl...
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Shifting Views on the Relevancy Of Option Trading.

An article entitled "This Option Craze Could Spell Market Trouble" by a fellow named Steven Sears in Barron's this month is of extreme interest to me. He starts with the sentence "The options market is in the throes of a speculative mania." He claims that the industry now characterizes options that expire in one week as being financial fentanyl. One of this sentences says - "The truncated expirations seem to mostly incite aggressive speculation as they reduce put and call prices into Wall Street's version of cheap scratch-off lottery tickets." Is he adverse to these types of trades? Well he side tracks this question by saying "The curent option trading mania is dominated by hot teck stocks like Nvidia, Tesla, Meta Platforms, Apple, Micosoft. Super Micro Computer, and Amazon.com. Many of these stocks are so expensive that only weathy investors can afford to buy 100 shares - and even they might pause at paying top dollar for such steeply valued names." In other words he admits that short term option trading is not going to go away. In order to add more favor to his articles he references comments made by a fellow named John Marshall with Goldman's. It is Mr. Marshalls opinions he says that "the option markets provides rich details about investor expectations for coming catalysts, such as earnings or investor days". I am not sure what he means by investor days. He then negates the seriousness of such a conversation by adding this sentence. "Many experienced investors think trading options ahead of earnings is the equvalent of a coin toss." Now look at the movements in the following three stocks last five trading sessions. First Boeing.
The last spike up was yesterday a Monday morning. I you are a long time reader of these blogs you will know how I have talked about holding Boeing Calls over the weekend and gettng out if it jumps on Monday morning. Let's also look at a one day trading opportunity that became self evident the week before .
Now lets mention some of the selling pressure it was under back during the time period of March 12th.
Options are a way to capitalize on rationalizing the effects of short term events. Now Caterpillar in the last five trading sessions. What an remarkable move.
I have recently talked about how light the trading volumes are in option series on stock like this. Contrary to conventional wisdom, following the pack in how options seem to be trading is not a recipe for success. Lastly lets look at Disney in the last five days.
In the past two weeks I have written several blogs about how Disney is in an uptrend. My point is that to capitalize on short term stock moves is not a farfetched as many people think. Forget what the so called experts say.

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