Featured

What The Heck Just Happened Last Week? Everything Went Up.

We are living in a world soon to be affected by tariffs. We have not yet felt the pain of what that will mean. So why is are the markets going up? It doesn't make sense. Earning reports coming out are not that great. Boeing and Deere and Caterpillar are all struggling but their share prices continue to rise. Remember I talked about playing Walmart Call options on Fridays if Fridays turn out to be strong days? Walmart Call and Put options are something newbie option players can fiddle with. If you catch them right they can be explosive, especially their one day Call option on Fridays if the DJIA has a suprise rally. As of late it happens more often than you might think. It just happened this past Friday. I kind of get tired about talking about them. I also know how dangerous such a trade can be. Look at the action in the 96 series of calls. Shown below is Friday's one day action with the DJIA also jumping up as shown below. Walmart opened cautiously on the opening. In fact it...
Post a Comment

Remember Moderna?

Here is it's year to date chart. Look at the volume of trading coming into it towards the end of November.
Now it's five day chart.
What do I know about this stock that other traders know about this stock that might cause it to go up? Well nothing really. It's next earnings report does not come out until February 2025.
Look at this series of Call options near the stock's current selling price that expire this Friday. That's two trading days away. It's Wednesday morning, the one day of the week you sometimes see market reversals. This series of Call options could be hot potatoes.
Now here they are thirty one minutes later.
Now another seventeen minutes later.
These options still have 2.5 trading days of action in them. Anything could happen. Look at how Eli Lilly is trading on the day. It's up $22.00 at this point in time.There is no negativity today surrounding stocks in this segment of the market.
Yet anything could happen. 1:19 p.m. trouble. Things are stalling out.
Now at 1:27 p.m. things start to drop.
Here is how they closed out the day.
Now this, the activity on Thursday morning.
A nice jump upwards with the DJIA moving down.
Look at the high of $1.35 which is more that double the closing price of $.60 and above the bid-ask of $.80-$.95 when we first started this exercise. One question is would you have the stomach to play ten contracts on a situation like this? As a general rule one has to be more nimble playing options on $40.00 stocks that options on higher priced stocks like Tesla where the stakes are higher, as are the rewards. Here for example is this mornings action on Tesla and a look at how an "out-of-the-money" Call option reacted.
Yet the question then becomes the one of how do you know this was going to be the day that this breakout occurred? If you look at it's chart you will see that it did nothing in the last three days. Now back to Moderna. Good news! It's 12:30 p.m. on Thursday.
If you where holding these Calls how would you play them? One crazy way is to say now might be to say take some of your profits and play it the other.
If your doing it with profits is that wise? Should you be just chilling out and saying thank you, your trading activites for the week are over? Here is what one series of tommorrows Puts look like. Some traders got in closer to the $.20 mark and can already take their profits. Timing is everything.
Here is how these two Moderna option series closed out Thursday. First the Calls.
Now the puts.
Now Moderna's one day chart.
Moderna is known to suprise. Now Friday morning action.
What a happy ending for Call holders.
Look at the high of $4.40 on the day!

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