Featured

Why Tuesdays Around 11:30 A.M . Are Particularly Unattractive Times To Be Looking At Options That Expire On Friday

So here are nine examples of what the heading is alluding too. Bad times for the most part to be entering into option positions. 1) Tesla. 2) 3) 4) 5) 6) 7) 9) 8) Now the closing reading on these Calls at the end of the trading session. $6.20 is down from $8.03 on Tesla and on First Solar the Calls are $3.10 down from $3.35. Here is what the markets did on the day. So let's continue on. Now Elli Lilly and Caterpillar. Elli Lilly went from $13.40 to $15.65 and Caterpillar went from $3.95 to bid $3.95 and $4.35. Elli Lilly showing strenght in the second half of the day could be a precursor to something good happening. Now Biogen. It went from $2.50. down to $1.45. Boeing Calls went from $2.88 to $3.70. In Biogen there were no further option trades on the day with the bid and ask going up towards the closing bell. Walmart couldn't do anything as the effect of this tariff situation is all new. When is food going to cost more? It's Calls went from $.88 dollars to $...
Post a Comment

Caterpillar Calls and Earning Reports

So the market tanked last Friday and tanked again on Monday to then rebounded on Tuesday. They are still down from where they were one week ago. Caterpillar released their second quarter earning's report this morning. Readers of my past blogs might know that the guidance offered for this most recent three month period of time was not particularly stellar. What I am referring to is the guidance offered after the release of companies first quarter earnings report earlier this year. Here now is the companies current financial highlights and two articles by writers with deeper insights than I have. I noted in my most previous blog how Deere, Boeing and Caterpillar have all tanked in the last week.
Did I know this was going to happen? Well commodity prices are not particluarly strong which indirectly affects their profit margins and rebuilding countries like Ukraine is not yet in the near term cards. Mentioned was the fact that sales to construction and resource industries declined. We kind of expected that. The big market crash last Friday coincided with the timing of Caterpillar's earning release. So many factors were in play. Here now is it's five day chart.
Now here is how one series of it's Calls traded on the day. What a nice bounce these options had.
Look a how low the trading volumes are. After the markets recent grubbing, and the fact that's it's summertime, no one seems to be in the mood to be buying one week or less Calls.

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