Deere On Earnings

Here is a look at Deere towards the end of the afternoon after an earnings report. It got beat up pretty bad. What we are now looking at is a printout of one option series which will be expiring the next day were trading towards the end of the trading session. Would now be a good time to buy into these 395 Calls and try to play tomorrow's upside? Lets look at how these options traded the next day. Can you see they hit a high of $4.65 sometime during the following day? I did two very small trades on the Friday morning bounce back. I just wanted to cover my commissions a make a touch. Remember Deere options are extremely difficult to play and with only hours to go before they expire its not bad to take a profit whenever you see one. .................. My times in were 10:14 to 10:31 a.m. and 10:59 to 11.09 a.m. I missed the elusive high of $4.65 which happened after I got out. Part Two. Going forward. Let's look at Deere's five day chart and look at how the 400 series o

Caterpillar Puts - A Strange Twist Of Trading.

One day options that expire the next day? Crazy, stupid, nuts you might say. It's like playing chess with the computer. You never win. Hear me out. Knowledge can come from the craziest of places. I like trading options on Caterpillar because when it starts to swing, it can move quickly. It's also a stock void of random new releases. That's one of it's good qualities from a trading perspective. In contrast, random new releases mean that you're subject to the wind of changes for unexpected reasons. The stock Ford for example has random news releases about a thousand little situations happening almost every other day. If you read my last blog you will see that a few days ago that Caterpillar went up six dollars and then down seven dollars in a two hours period of time late in it's afternoon trading session. Many stock traders are now migrating into becoming "stock/option" traders and the demand to learn more about how to trade options is now going through the roof. Yet the path forward in learning is filled with trickery. The stuff that I write about is not going to be enough to be your guide to success. My approach is like a surfer with no fear or some would say no brain, looking for the biggest new wave to ride. My blog on Elli Lilly earlier this week talked about doing a two-or-three hour trade on playing the downside on it's huge just announced earning's pop. How stupid is it to write a blog about that? I know that but part of my journey in writing all of this stuff is to show how limitless these opportunities are. So here I am talking about Caterpillar again. This time I want to talk about what happened to it yesterday. Did I play it and did I make any money? No. I deemed it to be to dangerous. Why? Well early into the opening session the indexes were way up. I didn't want to add that new risk to my methodology of trading.
That was totally unexpected. How was Caterpillar doing? Up like five dollars? No. It was actually down like seventy five cents when I was checking it.
So what next? I like looking at Caterpillar Puts about an hour into the trading session with thoughts of catching a slide down. Yet here is the thing. With the market up over 500 points and with Caterpillar stuck in the mud, wouldn't there be the chance that Caterpillar would get dragged up in price as the day progressed? Stay away right? Here is what ended up happening. Here is a one day chart of how Caterpillar ended up trading.
It did get dragged up in the first twenty minutes of trading and then it decided to ignore what the rest of the indexes were doing. Here is what happened with the 337.50 Put series. That's where some of the action was.
Around 9:50 a.m. they traded down to as low as $.35 cents a contract (or $35.00 to purchase one contract plus commissions) and then around 11:00 a.m. they rebounded to $ 2.71 or $275.00. Notice only 136 contracts traded on the day. An opportunity missed? Perhaps. Do you now understand why I find all of this so fascinating? Yes I am a little fish swimming in a sea of sharks. That's the scary part.


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