Featured

Bad News On Caterpillar Going Into a Friday.

Here is how the stock traded on a Thursday.There was nothing unusual about the day. I am suprised they would dump this news on the market going into a Friday trading session. It messes up option traders. Doing this type of an announcement on a Tuesday prior to the markets opening would be a less disruptive day to do this. Here is the news. In a way this wasn't totally unexpected news. As they said, there were several other recent updates on this issue. Auto companies in their recent quarterly reports were harping on this issue. Look at how it dropped in price in the after market trading. Now here is how one series of Puts closed the day. Look at how this news totally caught the markets by suprise. The secrecy of this news is a credit to Caterpillar. If Caterpillar had this news are Deere Call holders going to get worried? Here is what happened on Friday morning. Now Deere which is now also trying to shake off this bad news. These two stocks tend to trade in similiar ways. He...
Post a Comment

Watching Boeing on A Friday Afternoon

Friday afternoon options are near impossible to trade (or are they) and Boing sometimes jumps $5.00 on Monday mornings when other stocks like Deere and Caterpillar are trading flat. It needs the weekends to unwind and reset. Did it survive the weekend without any disasters? It's a big company with many moving parts. Now it's Friday's chart going into the 1:00 p.m. period. Anything can happen.
Here is what the indexes are doing. It's another day of reporters calling out Trump on his lies.
Now look at these two series of Call options. They will expiring in a few hours. Both are "out-of-the money".
Might they move up in the next couple of hours? Here they are again about fifteen minutes later still walking a fine line. If the stock doesn't go up in the next two hours you lose. Is this the kind of game you want to find yourself in? Probably not, there are afterall safer situations to be considering.
Remember with options expiring on this Friday you have to be out of your postion by 3:00p.m. and not 4:00p.m. otherwise you run the risk of getting sold out. That's just the way the system works. If they expire worthless there is no closing out commission to pay. Now let's jump ahead one hour.
$.35-$.38 up from $.23-$.26. The stock has inched up less than a dollar. 445 new contracts were added in the last sixty minutes.
The markets are not doing much. Well they are starting to sell off.
That should tell you it's time to get out. In this case remember that 3:00p.m. is the deadline on Friday expiring options. Boeing ended up closing Friday at 174.63 so the 175 Calls we were watching expired worthless.(I will revisit this blog on Monday to see if Boeing had any weekend pop). Here is Boeing current five day chart and a look at it's new week's 175 series of Call options as of 2:26 p.m. Once again, sometimes but not always it pops on Monday mornings.
Read up on Boeing. It's an amazing company but struggling right now. **** The markets had a suprise jump on the close.
Check back in next week to see how this option series turned out. ++++ Read my previous blog on "Snowflake" which I just updated to talk about how to set up something called a "spread". The bounce on Monday morning.

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 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