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Why Exxon Options Are Changing The Game Of Option Trading

At least it is now in this current market environment. Look at it's one day chart today. Remember, options trading on it are set up in one dollar intervals. Can you see how it jumped up on the opening? Now let me show you four ways traders could have made money trading this stock today. 1&2) A double happened right off the bat. Buy the 116 Calls at 9:30 a.m. and sell them at 10.00 a.m.. Or wait until 1:45 p.m. That would have also worked. 3&4) Buy the 117 Puts at 10:00 a.m. and sell them at 11:00. a.m. Or buy the 117 Puts at 1:50 p.m. and sell them at 3:55 p.m. Is it really possible to make three or four meaningful successful option trades on one stock in one day? I would say yes and in this case it helped that a double happened in the very first thirty minutes of trading. Sometimes the charts don't look like this. Let me give you this example from the opening of the trading session last Friday. From watching Exxon charts daily you will see a patte...
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Roku And It's 2nd Quarter Earning Report

Let's start with the time period of Thursday morning with an earning's report coming out after the closing bell. Look at how crazy expensive these three series of Call options are. They are the Roku "out-of-the-money" Call options that expire tomorrow. The volume in them is not all that crazy but if I owned the stock I would be tempted to sell the Calls against my position and hope they would expire worthless. Tomorrow is Friday August 2nd.
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Why pay so much? Why pay $4.05 for a Call with a striking price of "58" with one trading day to go in the contract? The stock would have to jump four dollars just to get your money back? Talk about stupid? Yet then again Netflix, a company also in a similiar space sometimes moves like ten dollars in one day. Here now is a look at what happened by showing tomorrow's five day chart.
Down $2.19 on the day to $53.14 with the DJIA down over 600 points.
Say goodbye to those Calls if you ever bought in. Now let's look at it's year-to-date chart.
Can you see how it dropped about $35.00 quickly on the release of it's first quarter's earnings? That's part of the reason why these Calls were so expensive. On good news it could have really popped. So what were it's second quarter earnings actually like?
It's still reporting losing money per share however their guidance is starting to look more promising. Having the markets drop over 600 points on the day (it was down even more than at one point during the day) really squashed any upside potential. The game never ends. Here now is how next weeks 53, 54 and 55 series of Calls are trading.
Pick you battle. How did things turn out four days later in a crummy market? Not good. Look at these same options. People however are now waking up to the fact that the quarterly earnings report was not all that bad. Trading options is never a walk in the park. There is still time for these Calls to suprise.
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