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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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More On The Concept of "One Day" Option Trades On Friday

How do you learn about stuff like this? One way is to look at raw data. Here is the raw data on how five different stocks traded last Friday. Only that Friday. We don't care about any other day. After looking at these charts I want tell you I know what your answer its going to be to this question. The question is, is there anything in particular that stands out about the one day trading patterns of these five stocks? Your answer is going to be they are all different. Good answer.
If you are ever going to start trading one day options wouldn't it make sense to pick five of your favorite stocks and save the histories of how these stocks have traded on recent Fridays. Tesla swings big and it would be interesting to see its last four week's Friday trading histories. Tesla has the added intrigue of having higher risk "out-of-the-money" options that are known to burst in price on twenty or forty dollar swings.Tesla stock sometimes does that in one day. (Other stocks not so much so). Looking at all these charts is a good thing, it helps in tempering expectations. To all you newbies reading this what you need to know is that we are talking about buying blocks of shares (100 shares) per contract (or per order) without really having to pay their full price. What you are getting is the right to buy the stock at a fixed price. You can sell that contract whenever you want. Your actually just renting 100 sheres of a stock for a few minutes or hours and trying to guess correctly which direction it will move. Getting involved in this activity is also going to cost you like a $10.00 dollar in and $10.00 out commission. There is also a rule that you have to sell out by 3:00.p.m otherwise they will close out your postion for you "at market". Also part of this equation is the notion of buying in on a Thursday with the intentions of getting out the next day. If you are thinking to youself that is something you could never do let me remind you that in two clicks of a mouse you complete a buy and a sell. In my last blog I showed this Friday morning chart of Walmart.
Loosely speaking, anyone spending $250.00 on Call options about 20 minutes into the morning's trading session and who then sold out just before lunch would have got back about $1,250.00 or so? Is the liqiudity there to make these trades? Yes. Fills can be only a second away. Your dealing with computers and everything you do or attempt is time stamped.
*** There is so much to explain about option trading and these little snippets are meant to inspire. Most of the chatter you now hear about one day trading is coming from small fish like me. Find more people like me who are writing about this kind of stuff and do your own experimenting with real money or just pretending to trade paper. Why not learn to make Fridays a day to look forward to.

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