Featured

Put Options On The High Flying Stock "Sandisk" Are Difficult To Play

I have ignored this stock all year, not knowing much about it. The stock is Sandisk and it doesn't pay a dividend. Sometimes I think that the stock has gone up to much in price to quickly. Is trying to play it for the downside with one week Put options the way to go? Why try and play Puts on a stock that never seems to go down? Why not just ride the Calls up? The stock is up $52.00 on the day. At noon on a Monday here is what one series of it's "just-in-the-money" Puts look like. Do these premiums seem to be abnormally high? Yes. $59.00 dollars means $5,900.00 dollars per contract. If you are new to option trading stay away from these ones. Other stocks trading in this price range like Costco have options on them trading at much lower prices. Here is an example of what I am talking about. If we look back at a blog I did last week on Caterpillar you will see how much of the time premuim built into the pricing on these "one-week-to-expiring-options" decreas...
Post a Comment

Kicking the Can Looking at New Situations.

An observation. Playing stocks in the under five dollar range is ok if you have time to wait. When it comes to playing options on them you should look to take a two-to-four months out stance. Few option traders play options on stocks in this price range. I do and in these kind of markets as of late the two-to-four month period of time can be shortened up a little. What's sometimes is usefull is to watch three or four stocks in the same sector concurrently to spot a trend. Now look at these charts. They are all in different industries.
Now here is a chart of a stock that was $5.00 like a week ago. What happened and what do they do? They make batteries for Electric vehicles and they just made a deal with V.W. Remember a few weeks back V.W made a deal with Rivean and their stock is jumping up. Now here is another stock doing something a little bit different. They are building a hydrogen/electric powered air taxi with vertical liftoffs and they have recorded a 523 mile flight.
Here is yet another one that is different. "uniQure". It's in the gene therapy sector and they are working on something.
A four dollar stock went to over $10.00. Just think how the options on them did. Here is today's trading action on one series of it's Calls. These Calls are one month out and they had a good jump today. You may however be to late to the party.
That plus you have to do your own research first. Now back to the concept of kicking the can and looking for stocks in the same sector to help form an opinion of where that sector is going. Here are three stocks under $5.00 per share all making EV charging systems. First, Chargepoint and look at how it has traded in both the last five days and thirty days
.
Look at one series of it's Calls one month out.
The second stock in the same sector is Wallbox. Here is it's five and thirty day chart and some news.
The last stock to mention in this same group is Blink. Here is it's five and thirty day charts.
If you follow the E.V. industry you might have more of an insight as to what is happening than I do. All of the options mentioned on all the above stocks are high risk! Better logic might be to just buy the stock. To "feel the pain" of where these stocks are now trading at go back about three years and look at what they were trading for. Many retail players like you and I have got burnt. These are however interesting stocks to bunch together and watch on one of your screens.

Comments

Post a Comment

Popular posts from this blog

Waiting For A Drop On The Opening On Bad News - Eli Lilly

Image
Here is the bad news. The company is Eli Lilly. How bad is this news? Well look at it trading in the premarkets. So what do I think? I think the news is a setback of sorts, but not really all that bad. The stock is going to open lower, that's a given. It's like trying to play Boeing after an announcement that an airplane has crashed. So the stock is going to crash and it might have a small rebound and then it's going to slide down some more. A test of sorts will happen sometime in the afternoon. It might stock falling but then where will it go from there? The best case scenario is a recognition that investors got it all wrong and the stock ends up flat on the day. Yet there might be more of a downward dumping of the stock on the close followed by a selloff on tomorrows opening. Should option players be jumping in to play the upside on next week's Calls? That is the question. Here is a look at Boeing on the days after a crash. Day two after the crash was equally as ...
Read more

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slightly out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-ma...
Read more

News on Polestar , Lucid (Trading After A Reverse Stock Split) Plus Ford News And Vinfast

Image
Look at the one year chart on Polester. Now it's one month chart. What's going on? It's confusing. It was down $.36 cents on the week. If you want you can spend $.20 or $.25 on Puts and hope that the company goes under in the next five or six months. They recently raised more money by releasing more shares so it's running out of options. You can't run at a loss forever and this news will most likely scare off potential new car buyers. This actually is a low number of outstanding Put options. The consensus seems to be that it is not game over yet. Lucid started trading this week on a "one-for-ten" reverse stock split. Here is its one week chart. It was down $1.39 on the week. It's also going to struggle. Both of these stocks have challenges ahead. On a more positive note here is a chart that looks kind of perky. Ford on the week. The stock was down $.03 cents on the week and it was the 3th highest in share volume trading on the NYSE. It appears...
Read more