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What The Heck Just Happened Last Week? Everything Went Up.

We are living in a world soon to be affected by tariffs. We have not yet felt the pain of what that will mean. So why is are the markets going up? It doesn't make sense. Earning reports coming out are not that great. Boeing and Deere and Caterpillar are all struggling but their share prices continue to rise. Remember I talked about playing Walmart Call options on Fridays if Fridays turn out to be strong days? Walmart Call and Put options are something newbie option players can fiddle with. If you catch them right they can be explosive, especially their one day Call option on Fridays if the DJIA has a suprise rally. As of late it happens more often than you might think. It just happened this past Friday. I kind of get tired about talking about them. I also know how dangerous such a trade can be.
Look at the action in the 96 series of calls. Shown below is Friday's one day action with the DJIA also jumping up as shown below.
Walmart opened cautiously on the opening. In fact it was down just at touch and then shot way up in the first ninety minutes of trading. Here is it's one day trading chart.
Anyone buying in at the opening at the $.60 cent range it was trading at were buying Calls which were slightly "in-the-money". This means it would take only on fifty cent price movement over the coarse of the day to get get back one's investment and any price movement above that would be pure profits. That's not a bad business proposition. On a differenting note Costco on Friday warned the world that tariffs are coming. (Costco and Walmart do not always trade in sync with each other). The stock jumped on this news but it wasn't really any new news. Maybe it was just Costco just venting on the frustrations it is now feelngs.
Does this now mean that this weeks Puts are something to consider? Apparently not, based apon the current interest in them. Look at the number of open contracts on this series of Puts going into the trading week of May 19th that have five trading days of life left in them. Only eight open contract. No one is holding them. They appear to be super expensive. But wait, how crazy is this. Think of the millions of sets of eyes watching as this situation unfoils. Costco shoots to the moon and no one is saying "hey wait boys, something about the equation is not right". I get it, five day out Puts on this stock are expensive and it's better to focus in one one and two day Calls and Puts on this stock which are more affordable but shorter in life span. Here now is one series of next week Costco Puts.
Now this. A look backward at Costco Calls on Wednesday at 11:21 a.m.. What we are now looking at are the Costco 997.50 series of Call options with 2.5 days of trading time left in them.
Now look at how they ended up closing out at.
That's the kind of power mid week Costco options can have. One final comment. Costco is trading in the $1,000 dollar per share range. These are big-boy, bad-boy options. Beware!

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