Featured

Costco Can Move .

 Costco doesn't always follow which way the markets moves. Look at these Costco Calls this morning which is a Wednesday. First the Calls. Only six contract traded in the first six minutes, some as low as $5.30 with a current bid and ask of $6.65-$8.95.  $8.00 dollars would probably get you in now . Now it's Puts. Last at $5.20 but $4.80 would probably get you in. Here is it's five day chart.  Two days ago it was trading for $25.00 dollars a share less. Now a recap of the end of the day's readings. The DJIA was only down 106 points and look at what happened to the Puts. Now it's five day chart. Here is my point. In recent blogs I have talked about massive one day moves on a multitude of stocks. That's simply the way that the markets have worked as of late. Look at Tesla's recent chart as an example.  When you see a stock in the $1,000 per share range, especially one that is up on the opening on a Wednesday (which is the day of the week the markets can shift d...
Post a Comment

Carvana On A Monday Afternoon.

 Carvana had a good week last week. It was up $22.86. I talked about this American used car dealer franchise  in two of my last blogs last week.

It's a Monday. Let's look at it's Puts on it which will expire this Friday. What's the point? The point is to illustrate the power of Puts options over a short period of time. Before we do that let me show you how one of it's competitors is trading on the day. "Avis Budget", as you can see from the chart below is on fire.

Now let's talk about Caravana. It's now  12:17 p.m.. It's down $4.82. on the day. Is it to late now to buy Puts on it?  Why would you want to? Look at how it is selling off. Had you bought Puts on it forty minutes earlier you now could be selling out at a wonderful profit. Check out it's current  chart below. Do you think that it's on the verge of finding a support level?  It's an ugly looking chart.


When you see charts like this what do you think? The last time I did a blog on a chart like this it was of Costco and the stock ended up losing something like $35.00 on the day. As quickly as I could type this part of the blog up the stock dropped even more.
Now this. It's the price on the  315 Puts at 12:17 p.m. The price is $7.10 with a volume of 142 contracts traded on the day and a total outstanding volume of 149 contracts.. That is a very low number. The bid and ask are tight. That's a good thing.




Does it look like the chart will find some kind of a support level?  Now this.
 It's now 12:38 p.m. and the same Puts options we were watching twenty one minutes ago at 12:17 p.m. which were trading last at $7.10 have now traded up to $10.60 with a last trade of $10.10. Sixty four additional contracts traded during this period of time. That's a $310.00 increase in price per contract at the $10.10 level.. ( The high of the day on the Puts actually occurred only seconds earlier when they hit $10.60 on the day).
So what's the point? The point is that catching freefalls on stocks like Carvana which are know to swing wildly in price often daily can sometimes happen in only a matter of minutes. Traders can buy in a sell out  and get fair fills. Are you now wondering as to how Carvana's one day chart ended up looking like on the close? 
Here it is.




The stock ended up having a surprising upward  afternoon lift leaving these Puts in the dust. This is truly a great market for nimble option players to operate in. 
 Now this, a look at Avis Budget. I talked about Avis Budget at the start of this blog. I can't find any news as to why the stock is so strong. Here is it's five day chart.

Now look at the high and low on it's one day options.
Notice the low volume of trading in these options.  What a move upwards. The company has a global workforce of  24,000 employees.  Can someone explain to me why so few of  these employees, or even stock analysis watching the stock for that matter are not clued into any of this action? It totally baffles me. 

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