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Costco. It's Short Term Options

 Options on stocks in the $1,000  range often move  50%  or more in only a matter of  minutes on the opening on Wednesday and Thursday's . The trick is to  anticipate correctly which way the markets are going to move. That's a fools game you might say? Yes and no. It may not be a game you ever play but it might be something to consider to put in your bag of tricks when you are on a role. One thousand dollar stocks sometimes move five, ten or fifteen dollars on the day. If you have profits it's best to take them quickly. Costco is a prime example of that. Let's look at this mornings action. First it's five day and one day charts. Tuesday's trading was kind of choppy. Might it drop on the opening tomorrow? Here is a look at where the 1,035 series of Puts closed that expire this Friday. They closed at $8.50. It looks like Costco cycled up about five times yesterday. Given a weak market opening doesn't it stand to reason a three or four or five dollar will be i...
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Boeing On A Dip

First it's five day chart.
Stocks after a dip like this sometimes take time to recover. Buy nexts weeks Calls just slightly "out-of-the-money" and sell this week's Calls against them. Here are the two series we are talking about.
Now the series with the shorter expiracy date.
Buy the longer term Calls and sell the shorter term Calls and hope the shorter term Calls expire worthless. What caused Boeing to sell off so quickly? Airports were crowded over the long weekend that we just had. People where flying in record numbers. Now read this.
So what to think? Boeing, partially because of it's size is easy to criticize. Yet a few cleverly worded paragraghs should not be enough to set off alarm bells. One takeaway is that there is a risk involved in purchasing Boeing Call at 3:59 p.m. on a Friday afternoon, especially before a long weekend. This stock has struggled as of late. Now at look at the two options series we just talked about after the close today, a Thursday. On a percentage basis this weeks Call lost more than next weeks Calls..
After tomorrows closing (a Friday) I will tell you what all this means. Boeing sold off on Friday (
) and the 165 Calls that I suggested should be sold as part of a spread ended up expiring worthless Here they are.
Here now also is the closing reading on next weeks series of 165 Calls and Boeings five day chart on the week.
Doing this spread at this point in time kind of backfired because Boeing dipped again today. Yes you do get to keep the $157.00 you collected on the expired Call contract you sold however the offsetting 165 Call one would have purchased to create this spread is also down now. A bounce on Monday or Tuesday is now needed to save "next-weeks" Call option. Now Monday at 11:30 a.m.
At this point in time you are in a break even situation if you did the spread I talked about. It's not exactly a pleasant ride. Tuesday had news. Boeing always has news.
Tuesday. Did you get out of the 165 Calls yesterday to recoup last weeks investment? The 160 Calls are the ones that could now gain from a short term rally.
To be continued.

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