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Caterpillar Calls. Trying To Make It Simple

So if you like the stock Caterpillar and want to play the upside on it using options you could buy these ones. But why would you? They are up 46% on the day so the real money was made in buying them yesterday and selling them today. The stock would now have to go up about $25.00 in one month just to break even and everything above that price would be profits. If you now look at a thirty day chart you will see that's what it did last month. These are "one month-out" options which are ten dollars "in-the-money" and they trade in a different fashion than short term options. Yet that not what I want to talk about. I note that only 13 contracts traded on this series on the day and the open interest in them stands at only 11. What does this tell us? 1) It tells us that professional money managers are totally lacking in their understandings of the dynamics of option trading. 2) It tells us that retails traders are to some degree misguided by the learning materials ma...
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Options on Five Dollar Stocks Can Surprise! HSAI

I have talked about this stock before (Hesai Group) and this morning it suprised again. Back on May 17th I did a blog on it called "A New Company To Learn About". Now lets look at it's current five day chart leading up to this morning.
Look at yesterdays volume pour into it. Now this mornings early action. Another spike in volume on the opening.
What's all the excitement about this morning?
If you don't know this company here is what they do.
Now back to my May 17th blog. Where were the five series of Calls on it trading back then which expire in January 2025? Here is how this same series of Calls is trading now.
No one had any interest in them. The bid and ask where crazy far apart. The option makers were burdened by making option markets for a stock with not much of an option trading history. The worry aferall is that a stock like this could double or tank overnight on news. Any stock could but more often it happens in this price range. Why would I say this? Well stocks in the $5.00 range are not penny stocks and are not likely to drop to zero overnight. With good news and a story that is for real they can sometimes pleasantly suprise. Here they are now.
So what happened today on November 27Th. Here now is its current five day chart and todays action in the 5 series of Call options on them that expire on Dec24, 2024.
Thursday was Thanksgiving and the markets were closed. This particular series of Calls still have a month to go. Trading volumes on Friday, the day after are usually expected to be somewhat subdued. Here is what happened to HSAI
This kind of upward action can't last forever. Options on stocks in the 5 dollar range can suprise.

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