CAT Puts

Let's start at noon on Monday August 26th. In previous blogs I have mentioned how low the volume of option playing is on this stock. Why is that? Well one of the reasons is that the company is light on new releases and anyone trying to analyze the company should do so with a longer term prospective. It's not like tracking Boeing which seems to have a thousand moving parts and near daily stories of what just happened the day before. That's why I have sometimes said Deere makes directional thirty day moves and it is easier capital on options that are one month out, rather than one week out. That said, here is it's thirty day chart. August 10th was the time to be getting in on it's Calls. It's path forward now is less clear. That said, let's now start this blog with its five day chart. It's flat on the day after being higher on the opening. ........ One thought. It could rebound a couple of dollars before the end of the day. Here now is how it closed ...

Read this. Stop right here if you want or keep reading. What's going to happen when they change this red light to green?

Understanding the "bids" and "asks" is study in itself. The system is set up to ensure that most option traders are dissuaded from speculating in short term options. Look for example at the spreads on the opening on these Caterpillar Calls. The stock had a decent bounce on the opening however only one contract traded and it traded for only eight cents more than the previous days close. Does that seem fair? Not really considering the options we are looking at are "in-the-money" and the the stock made a decent bounce. The spread between the "bid" and "ask" is huge. The following example illustrates the same thing. The stock is only up a touch but the "ask" is priced defensely making it expensive to buy into yet the holders of the Calls are not being rewarded for the stocks upward swing. Early morning "bids" and asks" like this are troublesome. It's not only Caterpillar stock, there are other options series ...

First Caterpillar going into Friday August 16th, a five day chart. Now Deere. Imagine having options and catching one of these moves? Tesla and Boeing were also on fire this week. There was talk of unemployment numbers not meaning to much and talk of interest rate declines. Get in and get out when the times are good. The markets can change on a dime. I talked this week about Telsa Calls and said to get out prematurely and the same with Boeing Calls. But wait, there will always be more trading opportunities. That plus the markets did nothing on Friday after this monstrous run. There was no point in wasting your time watching your lists of favorite stocks after everything rallied so strongly on Monday to Thursday. Now the five day and one day chart on Deere. Who would be buying Deere stock on Friday after it had a massive rally the previous day? I don't know. Now look at how these three series of Puts traded on Friday. The only reason I am showing them is to point out how option t...

If your sitting in a Boeing Call on a Wednesday that expires on Friday hoping to day trade it for a profit I would ask you why? It's an expensive gig to be in with the time value working against you. Case in point is today's action (Wednesday October 14th). Look at it's one day chart. I see a bit of a jump between 10:30 a.m. and 11:30 a.m. but that's about it. Now a look at the 165 Calls. The timing would have to be impeccable to catch it. That's why I don't like Thursday options with two more days to to go. Yet buying in on Thursday around 3:59:47 might be one way to go, looking for a following opening bell swing. Now look at how these $172.50 Calls moved upwards on a Thursday morning bounce. Also look at the how the 165 Calls also moved up however not as much on a percentage basis. As with my advise in my last blog on Tesla I would get out of a situation like this. Hanging onto options on Thursday that expire on Friday is not my favorite game. Nor is buyi...

First a Monday morning August 12th premarket look at Tesla. First a thirty day chart. Tesla has a lot of moving parts which means that no matter how much you study the dynamics of how it operates you never can predict which way it is going to move next. Here now is a look at this coming Friday's 200 series of Calls and Puts. These numbers show closing Call prices of the closing markets last Friday. Do they look kind of expensive? It looks like you need a price swing of at least five dollars over the next five days to make any money trading them. What a daunting challenge. Let's move forward. Let's look at the days closing numbers on these two series of Calls. Notice how the open interest number in the Calls is unchanged. These numbers will only be updated before the following mornings openining. Now the Puts. There are always more Call than Puts outstanding. Now lets jump into the action on Tuesday morning at 11:49 a.m. . Tesla is jumping up. Now here it is now at the...