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Living on Kraft Dinner?

What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
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Nvidia Options With Two Days To Go

Triple witching is kicking in on Friday and today is a Wednesday with the markets being closed. It's strange that they are closed but they are. The next two days of trading are going to be different. Big players with big bets most likely made closer to the start of the year now have to be rolled into something further out. If you just made $3 million dollars on stock options from trading Nvidia wouldn't you think about taking a tiny portion of the profits and put it into playing the downside? Here now are Nvidia's five and thirty day charts and soon we will looking at the crazy volume of trading on it's "near-to-the-money" Call and Put options. These are options with only two days of trading days life left in them.
Can you see it stepping up in price nearly everyday? Like up five days in a row. If you get a ruler out and join up the lines you will see that odds are, based on day to day action that's what is going to contunue to happen. Might it slip back off a few dollars or dive down twenty dollars on ugly news? It could. Some speculators think like that. Remember it recently enjoyed a 10 for 1 stock split. The stock is hot. Now this.
Look at the total number of contracts traded on the day and the end of the trading session's open interest. Think of how large these numbers are. Now the Puts.
If the stock swings $4.00 in one day somebody is going to make some money in the next two days! Let's now see how Nvidia traded on Tuesday. Remenber how the markets were closed on Wednesday .
To be continued. Approaching 1 p.m. on Thursday.
Now a look at the Call options.
Now the Puts. This time it's a 12:52 p.m. readout.
Now a Thursday "end- of-the-day" printout. Look at the drop.
Now the Puts.
Now for Friday.
Who would be brave enough to be buying the Puts on Thursday's strong opening? Think about this on our next triple witching occurance!

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