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What Happens On Friday Afternoons In One Day Option Trading.

I want to talk about one day (Friday) options . Do your own homework on this topic. I want to  show you how  it works and what this type of trading potentially has to offer.  This isn't however the most the most exhaustive of studies.

The first stock is Costco on a Friday morning when most of the market is down. Trump made some stupid comments about "Apple" and people are getting fed up with his style of management. A one day  cloud has set it over the market. Trump is to blame.

Friday Calls on Costco. Will these Calls rebound? Can you purchase one day options that expire today at 3:00 p.m. and make money by holding them for a few hours? (After you buy in you are free to sell them whenever you  want).  Now a look at these same Call options at 1:44 p.m..
Are you surprised  at what you see?  These Call options have sold off in price and time is now starting to run out. These Calls are down but potentially not out. 

2) Now Walmart and it's  96 series Calls. What are they up to at 10:15 a.m.? This particular series of Calls at this point in time is $.11 cents "out-of-the-money". That's not much. Read my April 13t blog entitled "What can happen with one day options when the DJIA jumps 600 points".
A look at them now at 1:53 p.m. which is well over three hours later.
They are not much of a difference than before. The stock has moved down a touch. Once again we are talking about a day when the markets sold off in the morning.

 3)  What else can we look at? Let's try Boeing. It's a stock that has moved upwards as of late.. Notice the big drop. Could it rebound?
How are they doing at 10:35 a.m.? Once again might it rebound a touch?
Now a look at them at 1:59 p.m.  The stock is only  up $.34 cents a few hours later.  That's nothing really.


4) What about Tesla? Isn't that a hot stock? Here are the 340 Call series of options in the morning. Look at the high number of contracts traded. That's typical for this stock.
Now here they are at 2:04 p.m. The stock has now moved up over $3.00 from when we first looked at it however the Call premiums have barely moved? What's that all about? Look at it as being shrinkage, or what happens as  much of the remaining time value dissipates. Anyone holding two or three day options do not have to worry as much about this issue
 Now let's move forward to bring this blog to an ending. Here is what happened to all of these Call options at the magical must get out three p.m. “get-out” deadline. We will first start with Costco. Here is how it was trading around 3:00 p.m.
What do I see? A stock only up $.33 cents from where it was when we first started to look at it. So what happened in the early afternoon?. Here is it's one day chart.
For a couple of hours these Calls were "in-the-money" however  they ultimately ended up disappointing .

2) Walmart and the 96 Calls. At 10:15 .a.m. they were $.29 cents.
 At 3:04 p.m. they were $26 cents.

3) Boeing. At 10:35 a.m. the $200.00 series of Calls that expire today were at $1.71 . At 2:06 p.m.. they were at $2:15. Now here they are at 3:00 p.m. which was their selling deadline.
So just a tad higher. 

4) So what about Tesla? We saw the Calls  go from $216.00  to $265.00 at  the 2:08 p.m. time period to then settle at  the $138.00. at around 3:00 p.m.
Can you see a trend in all this madness?  Not much on the upside really happened. Getting in at  mid morning with one day Call options after the markets have had a sizeable morning drop was not really the way to go. The one day options typically peter out in price  movement after the first two hours of trading. In this case the DJIA average ended up closing down 256 points on the day with most of that downward  pressure happening in the morning.  Imagine in contrast the potential of playing "one-day- until-expiring-Call options" on days when stocks like Tesla, Costco and Boeing are  jumping up ten and fifteen dollars in one day. It sometimes happens. Blogging about one day Call options on a day when the markets are tanking makes for a tough read. I will try to do a blog like this on a happier day with a  Friday rally.

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