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The Trap On Costco With One Day To Go "Call" Options

Let's start by saying it's 3:00 p.m. on Thursday and I am going to talk about the big sell off that Costco experienced this morning on news that seemed to take some time to be disceminated. It turned out to be regular stuff kind of news on the subject matter of last month's food sales. In the early few minutes of trading the average retail trader had no knowledge of what this news was all about. Opening markets started falling quickly. That sometimes happens. Let's move forward to 3:03 p.m.. Costco is way down in price $28.00. That's a big chunk. Might it's Call options rebound tomorrow? I don't usually find these "looking-for-a-rebound" situations to be very profitable. Might there be a second wave of opening selling pressure on the opening tomorrow?. That's the worry. Now there is more to the story that option traders might want to hear. It has to do with what happened this morning. Costco had a great fall. Look at this morning chart. It l...
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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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