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Costco Options With Two Days To Go. Something To Consider , As Strange As It Might Sound

First, Costco is down $44.79 over the last ten trading days. The company sells food and everyone needs to eat. The chart looks like it might now want to rebound. Down $44.79, it's crazy that it could sell off that much in such a relatively short period of time. What about other stocks in this price range like Netflix? Well the Netflix stock is priced at even a higher level. It's at $1,257.00 today and yesterday afternoon it was at $1,213.00. Yes, today it was up $31.30!. My point is high priced stocks can make big moves and that's what makes Call and Put options on stocks like this so potentially rewarding. Most people would never consider trading in Costco options. I get that. More on that later. Now back to Costco doing so poorly as of late. It's now Thursday morning before the markets are open and here is a look at it's "at-money" Calls and Puts. Notice the light volume of the "open interest'. The two numbers reported here are 480 and 358. Whe...
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Caterpillar On A Hot Day

The D.J.I.A. is up going into the noon hour.
Let's look at the Puts on Caterpillar at 9:43 a.m.
Look at Caterpillars five day chart. Up $30.00 in five days.
Question. Why didn't I talk about buying Calls on it five days ago? Two reasons. 1) It's earning report doesn't come out until February 3th and that's when a decision to predict which way the stock will go might tweak my interest. 2) Here is how Caterpillar traded on the day of it's last earning report and a comment then made by management.
Notice how flat the stock traded on the few days leading up the release date. That tells me that was about to happen was truly a puzzle. The new concern now might be that Trumph with his tariffs might might cause unexpected things to happen. In any event, here we are looking at the downside on thes Puts that expire in two days time. Now here is an update on these same Puts at 12:36 p.m.
The stock in the last 2.5 hours is down $1.44 and the bid and ask on these Puts are only up slightly. Notice how low their trading volume are. If we look one striking price lower we will notice the same thing.
It appears that day traders now at 12:50 p.m. are not thinking about an afternoon sell off. I note Tesla is also having a strong day to the upside and option traders are on Tesla are more proactive in their thinkings.
Let's see if buying two day out Puts on a Wednesday with a strong market opening is a good thing to do? It would be nice to see a profit by the end of the day. Now the final readings.
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If you bought the Puts this wasn't a pretty trade. Why is that? Well guessing the reversal in a strong stock is never an exact science. That plus the markets stayed strong until near the end of the day. The bottom line is that you can play mid week reversals on strong stocks for a one day play and make money in doing it.

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