CAT Puts

Another name for this blog could be "Boeing On The Day After One Big Crash". If you recall Boeing had earnings come out yesterday and the stock jumped on the opening and then sank as the day progressed. Boeing is struggling to get itself back upwards after a couple of years of brutal earnings reports. Here now is its five day chart as of the close on Wednesday. It's earning report came out on Tuesday July 29th. Now it's one day chart on July 30th which is also the last day of the five day chart shown above. So one question to now rehash is how do we explain Boeing jumping up in price within seconds of the market opening after it earnings report came out? Look at the actual first few minutes of trading. Here is a chart below showing this action. Boeing jumped up and then sold off quickly. In the late afternoon the stock took a grubbing. That's what the chart below shows. Can you feel the panic in the air as the afternoon dragged on? Traders...

Avis runs with the stock symbol "Car". Here was its chart today. We are starting to see more charts like this. Here is one reason why it fell. Here are how other companies I watch in this same space traded on the day. Now these two five day charts. ........... Is the sky falling or is this just a bump in the road for Avis? It's to early to tell. If the job market says healthy then this is just a little bump in the road and G.M. is forcasting record breaking profits for the next two quarters. Now a five year chart on Hertz. Maybe these three month out, "in-the-money" Call options would be an interesting play. It would be a bet on the used car industry surviving the rest of the summer and slightly beyond. Could the stock go back to where it was trading thirty days ago? People still need cars to go to work. Yet what again do I know? **** A next day look at the stock Carvana. Yes used cars are still expensive.

It crashed hard. It has had crashes like this before. Yet it's not a company that is going to go away. They still have sales in the billions of dollars. When the dust settles this stock might gain back what it has just lost. Would I be rushing in to play the upside. Short term no but maybe long term. It looks like Eli Lilly fell in sympathy. Can you play Eli Lilly for a bounce back up? Look at it's chart. It's wild. Here is it's thirty day chart. Knowing that Novonordisk crashed yesterday and knowing that Eli Lilly took a slight hit also creates an opportunity. Novonordish woes are not Eli Lilly woes. Here is how Eli Lilly is trading in the premarkets this morning. It's up ten dollars. Options can be used as a vehicle to make money on causal relationships. Now for one caveat. Playing options on stocks in the $750.00 price range is next to impossible. Why? Well the premiums are crazy expensive. Here is an example of how one series of it's the Calls is trad...

It's Monday morning and earnings come out tomorrow. Only a small number of new Call and Put holders are lining up to do battle. Here is it's five day chart. Here are one series of the Boing Calls and Puts closed the day with it's earning report coming out before the opening tomorrow. It's the classic case of having more outstanding Calls than Puts before any earning's report. Option traders are inherently optimistic. Skeptics, and there are many say that the option makers control all of this action and its best to just stay away. Could you buy both a Call and a Put and hope that the stock moves more than about $10.50 in one direction? That's what it would take to break even. I don't like such a strategy however it does sometimes work. Remember that Tesla dropped about $26.00 on the opening last week after it reported? Here is how Boeing closed the day. Here is the effect of how this strong close affected the 235 Calls and Puts. Both the Calls and Puts w...

Option trading on Monday mornings approaching noon gives you amazing leverage on stocks in the $100.00 price range. Let me proceed gingerly on this topic. Instictively readers might feel a surge of backlash to what I am trying to explain. What does this guy know? Yes I am just speculating as to what might happen. That said, stick with this. Walmart doesn't have an earnings report until August 21st. Here is it's five day chart. Now it's one day chart late in the morning. Here is what I am now attracted to. Why? Well for the last hour it's chart seems to be range bound and if it stays in that channel these Puts could go up 25% to 35% in a short period of time. That's all I am looking. What I do know is that "five-day-out" options on $100.00 stocks is like sitting on the blade of a knife. Now this, some thirteen minutes later. My timing was off a bit. Seventy eight new contracts have being added. The stock broke out in an upward direction which is somethin...