CAT Puts

It's all about timing. Is this a good buying opportunity? Chinese built electric vehicles, the news coming out in this space can be exhausting. Monthly auto production numbers are what traders look at. Nio's stock is not being rewarded for this years performance. If a car company on this side of the ocean had growth like this traders would be all over it. It's all a guessing game. Let me now tell you why I like this situation. .... These Calls are now priced at $.08 and the high this morning was $.13. An uptick back up to let's say $5.06 would bring these Calls back up to $.14. What a stupid exercis eto be chasing you might be thinking. I kind of agree. Yet the point remains that a small updraft fow whatever reason would make this a profitable trade. Can we find guidance in it's five day chart? What I do know is that I wouldn't want to be playing this series of options if it had only one or two days to go. As hours tick by you might be stuck in this waitin...

Yet I didn't do anything because of a phenomenon called "Triple Witching". Triple Witching Day is a quarterly event on the third Friday of March, June, September and December, when stock options, stock index options, and stock index futures all expire, causing heavy trading volume and increased market volatitity as traders close or roll or roll over positions. Why try and trade in that environment? Now this. Sometimes options going into their last day of trading gap to the upside on the opening, This can create instant profits. Tesla, Boeing as of late, Caterpillar in the last six weeks and Eli Lilly when it is hot can spike on Friday mornings. There are others. This time around, meaning last Friday morning Telsa didn't do anything but the other three stocks did. Look at their Friday morning jumps. Now this, two option positions that looks hopeful for next week. *** I don't really want to go this route and suggest future trades... it's outside of my comfor...

I don't like Thursday afternoons in short term option trading. A lot of things seem to happen on Thursdays like government reports coming out. I don't buy in the final seconds of trading, Call options on Boeing, Caterpillar or Eli Lilly or hoping for a Friday morning bounce. The hope today is to do find something good to trade and walk away by early afternoon. Welcome to Walmart. Options on Walmart are tight. Other stocks like McDonalds have options which trade sloppily. Let me show you what I mean by this. Good luck trying to get a fair fill if you're buying or selling. Now the Walmart side of the story on how options trade on it. Can you see the tighter bid and ask and the higher volume of trading? Step back for a second and consider this. The stock is only up $.26 cents in the first 45 minutes of trading. What does that tell us? It's waiting to decide which way it wants to go. Now this. These Call options went on to move up to $1.71 just before noon. There was the...

In past blogs I have mentioned how light the volume of trading is in Caterpillar options. Trading them is a challenge. Deere options are also like this. Caterpillar can and does (in recent times) swing $10.00 on any given day. It is noon on a Wednesday and this the one day of the week where you can look for reversals on "one-week" options expiring on Friday. I have talked about this many times before. Here are it's five and one day charts. Now a look at two of it's Call option series. The 560 series actually offer excellent value given how large it's morning drop was. Who cares to check the news on it? When it drops this much this quickly the bad news, if any, is already baked into the equastion. Now the second series of Call options I am showing you are $44.00 "out-of-the-money" and expire in 2.5 days. "Out-of-the-money" Calls to this extreme are a speciailty item. In layman's terms they are a longshots. They can be excellent trading veh...

Can you pick just one stock on this list for a rebound? Here is my list. Now let's look at Pfizer. I don't like trading short term options on Tuesdays because I know Wednesdays are better days to be looking for meaningfull reversals. When the morning dust settles might these ones look promising for a rebound? The stock is down almost one dollar. The opening market have traders wondering if they should be buying into this dip. What happens if the markets decide to drop 500 or 700 points? Now, here we are 15 minutes later. Can you see with these "in-the-money" 24.5 Calls the option makers have widened their bids and asks. They are getting defensive as this could be an inflection point. At the same time the 25.5 Calls which we first looked at now further "out-of-the-money" have taken a beating. Here they are. Look at this chart at 10:39 a.m. Just the fact we are only about an hour into the trading session tells me that it is still to early to be looking fo...

Is now a time for a reversal? When Exxon drops like this on a Monday morning it has the weight of the world's problems on it's shoulders. If it dropped double this amount you would know something is actually wrong. Here is it's five and one day charts. So anyone could recognize this. Why pick this time to look for a reversal? What happened to the support level at $118.00? Does the $118.00 level look like a stretch to far away? Now this. We are hoping for a pause in the downward action and hopefully a slight rebound. A rebound to $118.00 would work wonders. Here is it's 11:39 a.m. readout. A further deterioration downwards would be ugly but these Calls don't expire until Friday. The low volume of trading tells us that experienced option traders are not looking for any sort of a quick rebound. Let's see how this plays itself out. Now this, a 2:00 p.m. readout. Now a 4:00 p.m. readout. It took until noon to shake off the weekend sentiment but after that a rebou...