Why Not To Buy Not Rivian Calls With Two Days to Go?

It's obvious right? If you mess up and the stock opens the wrong way you only have one day for a rebound. Why put yourself in that position? Others might be in the camp of saying why not go for a fifty percent rebound on Thurday's morning opening. The stock sold of on Wednesday on very little volume. A morning pop is possible. The stock has being strong as of late. Here is it's five day chart. Now this, the seventeen series of Calls that expires in two days. They do look cheap after hitting a high of $1.55 on the day. If we look at a 30 day chart we will see that the stock is still in an uptrend. Why not look at the Call options one and two weeks out? Here are the seventeen series of Calls one and two weeks out They would be much safer to play and I will check in on these ones at a later date. So what happened on the Thursday opening? Let's switch gears for a moment and look at how Roku, a much higher priced stock opened and look at how their Call options moved.

The Crazy Last Day of Option Trading In Tesla.

First, look at it's five day chart.
Big jumps everyday. If you try and jump in and play the downside everyday you will quickly get beat up.
Here for example is one look at the Tesla 235 Puts on Wednesday at 9:34 a.m., only then to check out the same Puts a few minutes later at 10:15 a.m.
How do you know what to do? Well you don't fight stocks running up over $8.00 in the first thirteen minutes of trading. Now here is how these Puts were trading at 12:59 p.m.
The game is to sell the Puts when the stock is rising and then cover them to be out of the markets at a profit by the end of the day. It's not the small fish playing this game. Now today is Thursday July 4th and the markets are closed. Tomorrow is Friday July 5th.These Put options will be expiring at tomorrow at 3:00 p.m. If Telsa opens down two or three dollars on the opening there is the potential for a small reaction. They will still however be extremely "out-of-the-money". They might jump a touch in the first three or four minutes of trading, like a double, in fears it might drop down further however at the first whiff of support they will snap back to the price range they closed out at or even less. Logic would tell that day after day gains of strong upward price movements like this can't go on forever. If the stock starts to hold it's value or starts to move up the Puts will quickly be gone and soon forgotten. These Puts are afterall still over ten dollars "out-of-the-momey". Remember in a recent blog I talked about Deere Puts exploding upwards in price on a Friday afternoon? If the odds are only about one in ten, I am just guessing, that Tesla might drop ten or more dollars on the day then the risk of holding Puts on the opening might still be worth taking. If a tenfold increase happens on the price of these Puts happens only once in ten tries then you can afford to be wrong nine out of ten times. Let's now see what happens today. Here now is where Tesla is trading in the premarkets at 9:14 a.m. It now looks like it wants to go higher by another chunk.
It's difficult to read but the bid is at $251.25. That is another upwards jump. It then opened up at $252.09 and started to sell off. Can you see how the 235 series of Puts we were watching doubled in price for a very brief period of time? Very nimble traders may have caught that move with Put sell orders entered in with specified prices in the premarkets. What's the trading at $.03 cents all about? Only a sharp eye would pick up on that. It could be buy tickets entered in the premarket around the time period of 9:14 a.m.? At that particular point in time things looked particularly bleak for this series of "out-of-the-money" Puts. At 9:47 a.m. the stock dropped down to $242.95. That's over a ten dollar drop from the opening bell's price! Yet these Puts were still well "out-of-the money".
Now this at 10:08 a.m. The party now seems to be over for these Puts. It seems like a stretch to think that the stock will ever sell off that much on the day going forward.
Might this represent an opportunity to reconsider the Calls? Sorry, you are a little bit late to jump onboard. Now this, at 11:19 a.m.
A low of $2.20 on these Calls sometime around 9:45 a.m. when the stock was at $242.95 . What a rebound it had as the day progressed.
Here is how the 245 series of Calls closed out the day.
Finally here is what the Telsa chart for the week looks like.
The bulls have enjoyed a fabulous run. So much for all the youtube videos posted a few weeks back showing Tesla cars stacked up in overflow parking lots. It's funny how things can change.


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