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Caterpillar Puts On A Friday Morning

I am getting some flack from people saying I should have called this site CatCalls and not CatPuts. Oh well, I saved money by going with name Catputs. Now this. Caterpillar closed at $647.18 on Thursday and jumped to $655.54 at 9:47 a.m. on Friday morning. Then it dropped to 641.44, the low of the day at 10:43 a.m. which was 56 minutes later. That's a massive price swing. Looking for price swings on one day options are not normal trades to be thinking about. I get that Look at how this one series of Puts reacted. Option trader as I have often mentioned are afraid to play options on Caterpillar as it defies logic and continues to go up in price. It has an earnings report coming out at 8:30 a.m. on Thursday January 29th. Try and listen to their conference call. Profits may not be as rich as some people are expecting. Input costs have risen. Now let's look at the 650.00 Puts to see how they traded on the day. So few traders attempt to trade in them. Look at the super low open i...
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The Power Of "One-Month-Out-Options" For Short Term Gains.

It helps when the markets rally on a Monday but that's a secondary issue.
This blog is about stocks in the seventy dollar price range with options on them staggered in thirty day intervals. Is trading in options which trade in only in thirty day intervals better than options on stocks in the same price range that expire every Friday? My experience is that options on stocks that trade every thirty days tend to attract less interest which in turn means that they are less susceptible to "market-maker" manipulations. Yet this isn't really a point I want to debate. Now this, a look at the seventy series of Calls on "Carmax" at the end of the trading session today.
Bid 5:70 ask 5:90. Only two options traded on the day. Let's now look at it's five day chart.
So it jumped a touch but nothing to crazy. Now this, I did a blog last Friday, my previous blog where I showed what the same options were trading at on that day. Here is the printout I want to show.
A 10:39 a.m. readout on Friday morning showing only three option contracts traded with a last trading price traded of $4.07. Is there a lesson here to be gained? Yes, thinly traded "one-month-out" options can be successfully traded. What appreciations are there to be gained? Well there is less market maker manipulations. When you put in a closing sell ticket for only one, two or three contract and if the trend of the stock is upwards you will get a fill without going through the game of watching option makers wiggle the "bid-and-ask" in their favour. One month out options, played correctly are also less stressful to hold because the premiums built into an options price for it's time value will not disappear as quickly as the premiums built into one week out options. That's just the way I see it.

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