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Trying To Make Costco Options Impossible To Play That Expire In One Day.

First the Puts on a Thursday morning at 9:52 a.m. These are Puts $9.75 "out-of-the-money" with one day to go before they expire. Look at how crazy expensive they are. The stock would have to drop $21.00 just to break even. Earning reports are coming out at 5:00 p.m. which is after the market closes. The fireworks will start in the morning. Could it drop let's say $25.00? These are unusual times.   What about the Calls? Well these Calls I am now showing you  are "in-the-money" by $10.29 cents so really they are only about $10.00 higher than what the stock is trading at. Now this. The Costco earning report one hour after the markets closed. Here is the news.  Good news. Or is it? Same store sales are up. People have to eat. Need we need to worry about what is going to happen next?  Let's now look at these options traded on Friday morning. The Puts lose, the Calls win. Yet they were the ones that were crazy expensive to begin with so did they really win?  Five...
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Towards Understanding The Exuberance Of A Three Day Weekend

 It's a Tuesday morning and the markets are opening after a three day weekend.  The gates are being opened and the mice are being let out. Investors with bags of money are scurrying around looking to  find things to buy. The DJIA index is up in the first thirty minutes of trading.

So what to do? Why not look at two stocks that are the mornings rising stars and play them the opposite way. Why not cash in on the euphoria of the markets subsiding?  Is such an approach logical or merely wishful thinking?

Tesla  jumped on the opening. New models styles are coming and their European sales are down. Here is how it jumped.

Now here is how one series of it's Puts that expire this Friday are trading.
Now Netflix. It also jumped on the opening.
Here is the same kind of look at one series of it's Puts which also expire this Friday.
So now what? It's difficult to fight a rising market when both the DJIA and the Nasdaq are both surging. If only one index are surging then the decision to fight the downside would be easier. At this point in time we are only in thirty minutes of trading. If we are thinking of playing a reversal it would be best to wait until we are one hour into market trading.

Now here are the readings on these Puts one hour into market trading. This might be a good entry point.


Now a noon look at how things are trading. The markets are still trending up. Tesla is now at $357.04 up about one half a dollar from where it was 90 minutes ago.


Not much to get excited about . The Tesla Puts could be dumped and the trade would cost the cost of the commissions  The Netflix Puts are up $1.83 . If the name of the game was to make a bit of a profit in a ninety minute trade that objective did not really come to fruition. Trying to play the the downside on an upward moving market can be tricky.. There are easier opportunities to chase.
The markets ended up closing the day super strong. 

Here is how the markets closed the day and how Tesla and Netflix traded on the day.. You can see how Netflix did sell off in the late morning. It was not the day to be playing the downside.


Anyone buying in last Thursday on the close would have done well. Day trading in one week options is different that trading 30 day or one year out options. There should be no rush in trying to catch the action which in todays blog was not the situation. Options do however sometimes get mispriced on Monday mornings if the markets decide to take a sudden turn.  Now just a quick note on Boeing. I have often said it can jump upwards on Monday mornings based on weekend news.. Today this didn't happen even though the DJIA shot up 740 points. Here is it's five day chart with the left side of it showing todays action (May 27th). The stock was actually down on the day.

Here is a good article which helps to explain Boeing's current situation.

Boeing was an exciting stock to play last month as it charged upwards, however now not so much so.

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