Featured

Walmart "Last- Day-To Expiry- Puts " At 11:15 A.M. On A Friday Morning

It's a friday and these Call options expire today. Here are how it's one day Puts are trading. At 11:15 a.m. these puts are "in-the-money". Now it's one day and five day chart. .... Doesn't it look like it's one day chart is going to run out of steam? Now let's look at how the stock ended up trading on the day. It looks like the stock basically traded sideways for the rest of the day however it really didn't. It has it's ups and downs. The little red line shows the action in the Put prices on the day. Had you bought the Puts at $.44 per contract (or $44.00 dollars) at 11:15 a.m. you could have sold them out at 12:08 p.m. for $1.66 a contract, at 1:26 p.m. for $1.42 a contract or at 2:56 p.m. (four minutes before the 3:00 p.m. sellout deadline) for $1.35 a contract! What amazing gains compared to the five days of drama found in my previous blog about trading drone options with one week of trading life left in them. Interday price swings on ...
Post a Comment

The Boeing Crash And How Option Players React

 It's  going to take time for the dust to settle on this event. 

The stock dropped on the day it happened. 
This event puts option traders in uncharted territories. Do you look at the Call options on it that expire tomorrow?  Here is how one series of Call options were trading mid afternoon.

Let's now look at how these same series of Calls closed out the day.
One question to now be asking is why try to even being playing these options. Remember just a few weeks ago when Boeing had two straight weeks of upside movement?  Why get caught up in this turmoil now?  Let's move on. Let's now also track the Calls with the same striking price one week further out.

My thoughts are it's best just to stay away. The worry of why this happened might take some time to go away. There are easier battles to play.  A Friday update. The DJAI was down.

Boeing was down .

The 205 series of Calls we were tracking that expire today expired worthless and here are next weeks 205 Calls. Large selling volumes hit this stock on the opening on both days .It didn't help that everything was down. The volume of contracts traded where quite high.
Can you see the dip and rebound. Can you match that dip to the drop on Friday's chart. Shown below is a one day chart of how Boeing traded.

Imagine buying one day Calls at 10:30 a.m. and getting out two hours later? Shown is an example of how the 195 Calls traded on the day.

Did I catch any of this? No. I was busy doing something else. Traders glued to their computer screens were watching the DJIA average sell off all day which capped everyone's enthusiasm  to make crazy one trades on the upside. Yet traders who hone in on "hour -to hour"  Friday morning one day options would have witnessed this action happening. Are next week's Boeing options still promising? Maybe however I still don't like the concept of looking for rebounds on bad news situations. There are easier games to play.




**** An update a few weeks later.

Comments

Post a Comment

Popular posts from this blog

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 slightly 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-ma...
Read more

Another Blog On "Vinfast"

Image
There is so much to read about this companies history online. Do your own homework. Their success is not dependent on what ends up happening with their sales in North America. They are nimble. There are plenty of auto factories all over the world now for sale they can acquire. They have dabbled in Australia. Having access to money to keep going doesn't seem to be their problem. Rivian also seems to enjoy this advantage. Vinfast is currently building a new plant in India which could employ thousands of people. That's an emerging new market. New relationships are being built and new investors will be coming onboard. Are option players looking at this stock? Not really if we look at these "one-month-out" Calls. What about Calls further out? What about next January? Here is a look at the three and four series of Calls. Nobody seems willing to bet Vinfast Calls. Now this. Here are two snippets taken from a blog I wrote about this stock back in early December of 2024. ...
Read more

Waiting For A Drop On The Opening On Bad News - Eli Lilly

Image
Here is the bad news. The company is Eli Lilly. How bad is this news? Well look at it trading in the premarkets. So what do I think? I think the news is a setback of sorts, but not really all that bad. The stock is going to open lower, that's a given. It's like trying to play Boeing after an announcement that an airplane has crashed. So the stock is going to crash and it might have a small rebound and then it's going to slide down some more. A test of sorts will happen sometime in the afternoon. It might stock falling but then where will it go from there? The best case scenario is a recognition that investors got it all wrong and the stock ends up flat on the day. Yet there might be more of a downward dumping of the stock on the close followed by a selloff on tomorrows opening. Should option players be jumping in to play the upside on next week's Calls? That is the question. Here is a look at Boeing on the days after a crash. Day two after the crash was equally as ...
Read more