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

Deere Trading Sideways On October 1st 2024 - Few People Trade These Ones

The stakes are huge. Is Deere slipping? Here is it's five day chart.
Could Deere slip to $412.00 on the opening? If it did, could it slip further? The chart looks to me like it wants to open lower. Could you grab some Call options on a weak opening and try to play it for a rebound? Does history repeat itself? Here are how the 417.50 series of Calls traded yesterday on Oct 1st. Can you see how they dipped on the opening and came charging back up? That's the kind of action option traders like to see.
Look at how few contracts trade on a daily basis. Clearly trading Deere options is like skating on thin ice. To add some sort of prespective on todays action here is how the indexes traded today.
Shown above was Deere's five day chart. Here now is a look at how Deere traded traded today. After a nervous start it showed some strenght in the early afternoon.
Now a premarket look at Deere on Wednesday October 2nd. Look at these four stocks and look at the premarket bids and asks.The time of these premarket readings is not shown but they were about one hour premarket. Deere of the four stocks is the only one that has a wide spread between it's bid and ask. Even Tesla which often swings $5.00 or $10.00 dollars in one day has a tight bid and ask.
Now a quick look at Tesla in the premarkets to illustrate it's premarket swing. On our upper premarket look at prices, Tesla was trading at $256.28-$256.40 and here it is now. It's difficult to read but it's traded down ten dollars.
Did Deere open down. No. It opened flat.Telsa however opened down. It's premarket trading numbers had the stock moving the wrong way. Imagine purchasing a Put on it during the premarkets?
Now back to Deere. So how now are the Deere $417.50 Calls trading at 10:41:26 a.m.? Remember, Wednesdays can be turnaround days.
Here now is what I did. I bought one Call however I gave myself an extra week of time value. It's an Oct 11th $417.50 Call at 11:17 a.m. and I paid $5.00. Why didn't I buy a this weeks soon to be expiring Call that would expire this Friday which was much cheaper to buy? One of the reasons is that the "bid and asks" where to far apart. The option makers were purposely making the short term options difficult to play because of their known volatilty.
If the stock moves up a dollar or two this will be a good vehicle to participate in an upward move. Notice only two contracts on the day.
Here they are seventeen minutes after I got in.
So what happened next? I got out in the last minute of trading in an uptick after the stock dragged it's heals all day.
Look at it's one day chart.
Here is a recap of my trade.
In at 11:17:50 a.m. and out at 3:59:25.p.m. Looking at the strong close was I worried about missing the next day's potential opening rally? Not really. The stock seems to struggle in its attempts to break through the 416.50 level. Now a quick look at the premarkets of Oct 3th and what we observe are weak preopening numbers.
The action is set to begin all over again. **Thursday mornings I find are not favorable to option traders to option trader's looking at options that expire the next day. **** Thursday morning!! Holding Deere options overnight is often an expensive adventure.
Deere closed down the day $7.75.

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