Featured

CarMax Puts?

 Here is the number. Call in to listen to their just released quarterly report. You won't have to talk to anyone. It is 800-839-1247. In about five days this link will disappear. Please listen to it. I listened to all of it once and to the first half of it two times. What I learned is that their retail car sales on the quarter compared to the same quarter a year were up 6%. They purchased 336.000 vehicles from the public, up 7% and 48.000 from dealers up 38%. Their average retail sale price was $26,100, down $400.00 per vehicle from last year. They doubled their share buy back program. AI technologies are now helping them operate more efficiently. Everything seems positive. But wait, we are talking about  the used car business and what could happen if consumer confidence suddenly starts to wain? Look at it's three year chart. It now sees to be hitting a rough patch.  Now a one month chart.  All of this talk about tariffs and what level of tariffs will be imposed on n...
Post a Comment

This One Is Too Nervous To Watch. Pfizer

This is a medium sized blog full of twists. Try to get through it. First a five day chart of Pfizer.
In the past week it was up $1.05 and it was the 7th most activity traded stock on the NYSE most active list. It's in a breakout mode. Look at how it traded over the last three years. This breakout mode might last a few days, weeks or months. This stock has a history of moving somewhat slower than most stocks. A second quarter earnings report comes out July 30th. If it's good that could add a touch to the stock's price.
Now this.
As a general rule stocks and options on stocks in this particular price range are difficult to play and in this case everyone is following the same story. Fred down the street and John around the corner and Mark across town are all dialed into the same commentary. There is nothing that really gives you an edge when it comes to playing it. That's the problem. Here now is a look at the Pfizer "next-week-out" $30.00 series of Call options, this being Friday July 19th. They are 3 cents "out-of-money".
They might at first glance look reasonable in price and the "end-of-the-day" "open-interest" number is healthy. It's not like smart option traders were purposely staying away. Some day traders have decided to hang on to their positions over the weekend. That's generally not really a smart thing to be doing because Monday's sometime clobber options going from their fifth to their fourth of trading life. I would say "just say" away on Monday and come back to it in a day or two. A Monday closing look at the action. It did not move up in the morning. It went down. Here are the 30 series of Calls, the same one's we were talking about last Friday, now only nine minutes into the mornings action..
That's like a fifty percent haircut in the first ten minutes of trading!
Now just skip ahead two day to July 26th. Look at how the markets did today.
Down big time. Now look at how the same series of options are now trading. Pfizer is up on a down day, the same as it was last week on a major down day.
Now this.
With two days to go and markets upside down this is a tumultuous situation to be in. Last Friday this series of Calls closed at $.37 and now on a Wednesday closing they are $.18 cents. Yet the stock popped today and here is it's one day chart. Could it jump on the opening tomorrow?
Thursday are generally not good days to being buying into Call options that will be expiring the next day however Thursday mornings sometimes open stronger with economic news releases being more prevelant towards the end of the weeks. Let's see if tomorrow brings a selling opportunity. Now this on Thursday morning. Would you be getting out if you owned these Calls?
Thursday. The party happened. If your lucky you got out and who cares what the option does next. Remember back on Wednesday things didn't look that good.
In this case all the action was over at 10:10 a.m. . * Note this. At 9:48.am. the Calls were up 94% and were trading at $.35 . Then at 10:08 a.m. they reached a high of $.96 That was a sweet spot. Now. here is how this option series ended up closing the week.
..........
Notice the trading volume was way down from the previuos day? Why is that? Traders nursing these Calls all week were just happy with Thursdays action.

Comments

Post a Comment

Popular posts from this blog

Living on Kraft Dinner?

Image
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 ...
Read more

The Little Engine That Could

Image
Walmart again. It's all I seem to blog about. Here is it's five day chart. The stock keeps going up and the option series are set up in one dollar spreads. Even a fifty cent move on the stock moves the needle on these Calls. Look at how this series of Calls was trading yesterday at 3:00 p.m.. Now here is this same series of Calls just before noon today. Thirty days of upward action like this punctuated by the off day of decline. Now notice the higher volume of trading in the series of Calls with the higher striking price. These are the ones's with more leverage. At the same time look at the five day chart on Costco. The two stocks sometimes trade in tandem. Humpty dumpty sat on a wall .... a had a great fall. Someday soon a fall might happen but what a great ride it has been.
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 slighty 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-mas...
Read more