Featured

Why The Appeal Of Trading Caterpillar Options Is Now Diminishing

In previous blogs I looked at Caterpillar spiking upwards through the $1,000.00 barrier for the very first time. Twenty and thirty and forty dollar daily jumps on the stock were the norm. Today we are entering more sobering times. Pundits are now commenting on the upcoming release on August 4th of Caterpillar's quarterly earning report. That is not far away. The stock has doubled in price in a relatively short period of time. Is the party over? Look at Caterpillars one year chart. The companies earnings have not doubled in the last year. Far from it. So now what? Buy a Put option thirty days out in the hopes the stock might drop ten percent on a more normalized earning's report? Maybe. Here is an example of the cost of what one of these Puts would look like. Given it's current bid and ask the stock would have to drop to the $1,005.00 just to break even. It could, however most active option day traders are seeking opportunities which can play out in hours or in a day. Case...
Post a Comment

"Lucid" Reports It's Earnings.

There was not to much of a suprise but maybe a floor price has been reached. The stock is now down considerably and vehicle orders are now expected to tick up. A new more affordable EV is being launched this year that will cost less. Investors were nervous going into this report and the stock as of late has being in a precipitous slide downwards. It's going to take a day or two to process this fresh news. The EV industry is taking it on the chin as of late. Part of the good news is that Lucid is not using the word "burn rates" They also seem to have access to more cash going forward if needed. Both Lucid and Rivian are now appearing to be more fiscally responsible. Yet we now have to wait another full quarter to confirm such a suspicion.
Shown above is it's five day chart and below is it's one year chart.
In previous blogs I have talked about three, four and five dollar stock's and options on them. They can sometimes suprise. Is this one of those moments where Calls thirty days out are the correct one's to be playing? Maybe thirty days is not time enough. Look at these two different series of Calls.
One contract costs $39.00 dollars and one cost $20.00. Buy as many as you want or buy the options six months out.
In my prevous blog I talked about Rivian and we looked at it's situation. The just released forecast of declining sales is now sinking in and the stock was off again today. Lucid's news today has a different takeaway. It's sales are expected to go up. That's exactly what investors need to hear. On a differing, note Walmart popped again today. It took a few days to shrug off a disappointing earnings report. People still have to eat.
One final caveat. Don't buy any of these options "at market". The spreads are to far apart. Read my last blog which mentions the "short interest" on both of these stocks. Playing these options is not a walk in the park with so many variables in play. Remember for example, only a few days ago the D.J.I.A. was down over 700 points. Let's check in on these options a few weeks down the road. A Friday Feb 27th update. A touch of bad news that might take a few days to absorb. That's ok. Here is the news.
A six year tenure could be viewed as time for a change. The timing of this change in conjunction with the news of higher production numbers to come is a good thing. *** A March 18th update.
Now two snippents from a Feb 15th blog.

Comments

Post a Comment

Popular posts from this blog

Waiting For A Drop On The Opening On Bad News - Eli Lilly

Image
Here is the bad news. The company is Eli Lilly. How bad is this news? Well look at it trading in the premarkets. So what do I think? I think the news is a setback of sorts, but not really all that bad. The stock is going to open lower, that's a given. It's like trying to play Boeing after an announcement that an airplane has crashed. So the stock is going to crash and it might have a small rebound and then it's going to slide down some more. A test of sorts will happen sometime in the afternoon. It might stock falling but then where will it go from there? The best case scenario is a recognition that investors got it all wrong and the stock ends up flat on the day. Yet there might be more of a downward dumping of the stock on the close followed by a selloff on tomorrows opening. Should option players be jumping in to play the upside on next week's Calls? That is the question. Here is a look at Boeing on the days after a crash. Day two after the crash was equally as ...
Read more

News on Polestar , Lucid (Trading After A Reverse Stock Split) Plus Ford News And Vinfast

Image
Look at the one year chart on Polester. Now it's one month chart. What's going on? It's confusing. It was down $.36 cents on the week. If you want you can spend $.20 or $.25 on Puts and hope that the company goes under in the next five or six months. They recently raised more money by releasing more shares so it's running out of options. You can't run at a loss forever and this news will most likely scare off potential new car buyers. This actually is a low number of outstanding Put options. The consensus seems to be that it is not game over yet. Lucid started trading this week on a "one-for-ten" reverse stock split. Here is its one week chart. It was down $1.39 on the week. It's also going to struggle. Both of these stocks have challenges ahead. On a more positive note here is a chart that looks kind of perky. Ford on the week. The stock was down $.03 cents on the week and it was the 3th highest in share volume trading on the NYSE. It appears...
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 slightly 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-ma...
Read more