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Pick Your Spots To Play The Downside.

It's Tuesday morning and Boeing jumped up $17.30 on the previous day. That's a jump in the stocks price of 8%. Here is it's one day chart. There was news. It helped that the markets in general had a good day. Will the stock jump again on the opening? In premarket trading it's slightly up. Can you catch the downside action with Puts on the opening? Should you? Is fighting a strong stock a stupid thing to do? Here we are three minutes into the trading action. The stock is only up a touch yet these two series of Puts are down, one series 37% and the second series 41% and the trading day is just opening. Both are super leveraged trading vehicles. But wait. The bad news is that the markets are surging up. Caterpillar is on fire. Is hanging around with Boeing Puts a smart idea in times like this? Not really. Just get out. Get out. Forget this ever happened. Who cares if these Puts go even higher. A ten minute trade lets you get on with the day. Caterpillar also offered...
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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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