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Apple Options

Apple options can move quickly and they are tough to play. Product launches are highly anticipated, often delayed and widely followed. Short term options on Apple expire three times a week. The stock can move $3.00 or $5.00 or $10:00 in any given day. Do I have any special insights into how to play options on it? Not really, in this case the stock has moved sideways for most of the day after a quick morning drop. Now here is it's five day chart. Now this. So what makes these so difficult to play? It's that so many different factors can make the stock move so luck makes up a big part of what might happen next. A six dollar stock drop on Apple is more likely to experience a reversal in price than a twelve dollar drop. Let's see what happens next. Here is the $307.50 series of Calls in the last minute of Monday trading. Can you see the volume of trading shoot upwards in the last 70 minutes of trade. Let's see what the open interest is going to be going into tomorrow...
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Caterpillar - It's First Quarter Earnings Report And Traders Are Staying Away. A Read Which Might Be A Good Reference Point Going Forward.

Boeing rallied yesterday on the release of it's earnings report only then to tank. Caterpillar is tanking this morning in the premarkets. Let's begin with it's 5 day and 30 day chart.
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The world needs to be rebuilt and Caterpillar is there to help. It's growing, it's got a good reputation, it's not laying off employees and it's doing just fine. If it misses a beat on it's earnings report so what? Life goes on. Then there are those pesky analyst who are known to offer a convoluted spin on things. If you like Caterpillar just buy it on the dips and put it away. So the markets will be opening on the commentary by the companies C.E.O of "sales about flat". Phrasing it that way is a recipe for short term disaster.
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The two printouts above show some of the early morning action in one Put series and in One Call series. What happened the next day? A slight rebound with next to no traders trying to capitalize on a rebound. What does this tell us? It tells us option traders in general stay away from trading the "release of earning reports" on Caterpillar.
Now the one week out Call options.
Low open interest, a low volume of trading and relatively big pricings considering the these are only slightly "in-the-money" Calls which might take a few seeks to gain value. The bottom line is that this stock really got beat up and going forward it's going to be again upward journey. It helps that they are buying back their own shares. ** Now a look at how Caterpillar traded at the close on Monday April 29th.
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The volume of Calls traded is very light. That's suprising.

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