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The Topic of Tesla Jumping On A Friday Morning

Why am I often talking about playing Tesla options with one day of trading life remaining in them. Well the Call and Put options on this stock hava a recent a history of pleasing it's followers. What are the odds of sizeable jumps happening? I would suggest more often than you think. Jumps in the first hour of trading can be large. That' a given. Are you able to make money trading these hot potatoes? Yes and no. The concepts of fear and greed come into play. Here is how it jumped in price on Friday morning June 26th . First it opened lower. The time to buy in was in the very first minute of trading. It topped out at 11:30 a.m. That was a huge increase in price. Then between 11:30 a.m. and 3:00 p.m. it lost $7.00. Here is a better look at this action. . . Other stocks may also have interesting Friday trading patterns." Last Day Option Trading" is not for everyone. ** Tesla jumped again on Monday.
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Having The Guts To Pick Your Battle Using Options On "Uber" As A Trading Vehicle. A Good Read.

So you want to learn how to play options. Let me pick a stock. The stock I will pick is "Uber". Why? Well it has options on it that trade in one dollar incriments. Stocks that have options on them that trade in one dollar increments are easier to play than options on stocks that trade with $2.50 increments. Stocks like Tesla and Caterpillar have the options on them with the $2.50 spreads. The one dollar spread options are easier from the sense that any small shift in a stocks price will move the needle on the value of the underlying option. Now here is Uber's one month chart.
Now it's five day chart.
The stock was down $4.72 on the week but had a strong day on Friday when the DJIA was up 674 points on the day. If we want to play it up here is an example of one option series we could play.
It's a Call option that expires in two weeks time and the striking price is seventy two dollars. Look at the price it last sold for. It last sold at $2.10. What does that mean? It means to buy one of these contracts will cost you $210.00 U.S. plus an opening commission of about $10.00. What does that option get you? It gets you the right to lock in the buying price of $72.00 on one hundred shares of this stock up until Friday afternoon two weeks down the road. Well you don't actually have to buy the stock, you can just sell out your option position. Let me give you two examples of how this might work. Let's say the stock closes at $72.00 two weeks down the road. If that were to happen your Call option you are holding would expire worthless and you would lose all your money. You would not have to do anything, it would just expire. Let's say the stock closes at $73.00 dollars. That would mean you are $1.00 "in the-money" so you could sell your option contract for $1.00 or an amount of $100.00 minus a commission. You would net $100.00 minus the second commission of $10.00. Not much fun, right? Now let's say Uber decides to move back up to $80.00 where in was trading less than one month ago. Guess what? The option position you are holding would jump to at least $800.00. That's the 80 minus 72 difference. Uber's next earnings report comes out May 6th and it beat analysis expections in the last three quarters. Let's follow this and see what happens. After Friday's rally the market might just want to catch it's breath. Maybe you can get in for a bit less. I am not saying do this trade. I am saying that if you are new at this game this example might help you to get a feel for what to expect. Yes the markets are crazy right now. Let's see what happens with this one. There is more to this story.
Now this.
It's fourteen minutes into the Monday morning trading session.
This the reason I like options on stocks that have one dollar spreads. Now an afternoon look at the same thing.
If your happy with your profit just say thank you. This was a play on a stock closing strong on a Friday afternoon and having the strenght to move upward on a Monday morning. Is the steam is now out of this one? I will comment on what happens to this series of Calls next week. Here is a next Wednesday's look.
What a fight to get back up to this level.
Two week options are a totally different experience than one week options.

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