Featured

Costco on a Wednesday Going Into Thursday.

Let's look at it's five day chart. This chart is as of 3:30 p.m. on Wednesday. It's kind of going sideways. Sideway moving stocks take the air out of option pricings. Here are the 1040 Puts which are fifteen dollars "out-of-the-money". Why bet on a stock dropping that much in two trading sessions. One reason is that a drop of half of that will move the needle on these Puts. But why Puts and not Calls?  The main reason is that it jumped last week on an earnings report which was not necessarily all that impressive.  Is Costco about to take it on the chin?  Sometimes it takes a week or two for stocks to come off their "post-earning-report-highs". Then there is the new issue of Musk saying today "I just can't stand it anymore". That kind of statement does not bring confidence into the markets. Tesla was down $12.22 on the day. Now this. The street thinks Costco is going to go up. It's all really just a guess and I wouldn't want to be in...
Post a Comment

Boeing. An Interesting Chart Formation To Start The Week

 For lack of better words it look perky. The stock has had a nice run as of late with good news on a number of operating fronts. In the past I have written about buying calls on Boeing for morning pops on Monday mornings. He is it's five day chart.

Now here is how this weeks series of $207.50 Calls for this week closed on Friday. This series of Calls is very close in price to where the stock closed at on Friday. It will be the series of Calls which will benefit the most if the stock decides to move up in price. They closed at $2.95 per contract. That means one contract will cost you $295.00 U.S. plus a $10.00 commission give or take a dollar or two depending on who you trade with. Last week Boeing was up $4.96.  
In the pre-markets this morning the stock is up nicely  trading at bid $210.39 ask $210.50
Now at 9:35 .a.m. readout, which is five minute into the opening markets. 
The same 207.50 Call options are now trading at $5.10. So last week Boeing was up $4.96 on the entire week and now it's up $3.47 in only five minutes.  Get out, say thank you and go do something else. Here is what happens if you sit around for another forty two  minutes. 

It's now trading at $4.20.  It lost some steam. My thoughts in situations like this are just take your money and run. Now here is how it closed the day.
It's five day chart now looks different.

It could now see some resistance on the opening.
** I just updated  my May 28th  blog on "Unusual Machines". It popped a bit. **

Comments

Post a Comment

Popular posts from this blog

Living on Kraft Dinner?

Image
What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
Read more

The Little Engine That Could

Image
Walmart again. It's all I seem to blog about. Here is it's five day chart. The stock keeps going up and the option series are set up in one dollar spreads. Even a fifty cent move on the stock moves the needle on these Calls. Look at how this series of Calls was trading yesterday at 3:00 p.m.. Now here is this same series of Calls just before noon today. Thirty days of upward action like this punctuated by the off day of decline. Now notice the higher volume of trading in the series of Calls with the higher striking price. These are the ones's with more leverage. At the same time look at the five day chart on Costco. The two stocks sometimes trade in tandem. Humpty dumpty sat on a wall .... a had a great fall. Someday soon a fall might happen but what a great ride it has been.
Read more

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slighty out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-mas...
Read more