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. 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 $.75 dollars. Now the last one, Home Depot. $3.80 went to $4.30 So really the markets sold of or went side...
Post a Comment

Looking for Monday Morning Rebounds. Stocks Mentioned. Deere, Tesla, Boeing and Ford

Deere did nothing last week and it moved up Monday morning.
Here is how two series of Calls reacted in the first 45 minutes of trading. First the Calls that expire in four days, the $400.00 series of calls.
Now the $402.50 Calls.
Gains of 47% and 50% respectedly. What about Tesla? The reverse happened. Here is its five day chart and it dropped $8.36 on the opening before rebounding slightly. .
Here is what the Tesla 250 Puts that expire this Friday did. They closed last Friday at $8.80 and went as high as $14.90 on the opening, a gain of 69%.
What is my point? Well both stocks dropped over ten dollars a share last week and both stocks did a rebalancing act this morning. Let me add more context. Its 10:45 a.m. and here is Boeing's five day chart. I have talked about how Boing sometimes jumps on Monday mornings.
Boeing is up just over $1.00 in the first 45 minutes of trading and is hovering at a price pretty much in line with where it was trading at last week. For this reason I would not of had placed it on the list of stocks to jump on a Monday morning. Yet another candidate for a Monday morning rebound this morning was Ford. Ford last week was the NYSE most actively traded stock by share volumes down $.85 cents on the week to $10.02 on a poor earnings report. That's a big drop. Look at its five day chart, this time at the 11:00 a.m.mark on Monday morning.
The reasons for looking at a rebound of some sort on this stock on a Monday morning are not as compelling as the reasons for looking for a rebound in Deere or Telsa. Yet the jump in it's price neutralizes to some degree some of the damage done to this stocks decline last week. That's what Monday mornings are sometimes know to do. The Ford options on it's one week 10 series of Call options also doubled on the opening.
Is all of this called playing hunches? I would like to think that there is more to it than that.

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