Featured

Caterpillar Puts On A Friday Morning

I am getting some flack from people saying I should have called this site CatCalls and not CatPuts. Oh well, I saved money by going with name Catputs. Now this. Caterpillar closed at $647.18 on Thursday and jumped to $655.54 at 9:47 a.m. on Friday morning. Then it dropped to 641.44, the low of the day at 10:43 a.m. which was 56 minutes later. That's a massive price swing. Looking for price swings on one day options are not normal trades to be thinking about. I get that Look at how this one series of Puts reacted. Option trader as I have often mentioned are afraid to play options on Caterpillar as it defies logic and continues to go up in price. It has an earnings report coming out at 8:30 a.m. on Thursday January 29th. Try and listen to their conference call. Profits may not be as rich as some people are expecting. Input costs have risen. Now let's look at the 650.00 Puts to see how they traded on the day. So few traders attempt to trade in them. Look at the super low open i...
Post a Comment

Sweet Spots In The Market And More Used Car Market Observations.

This blog is yet another blog about trying to day trade Carvana again. Why? Well Carvana as of the last couple of weeks is in a sweet spot and seems to be powering upwards. Last Friday as I reported in a previous blog it jumped $12.78 in one day. Players in the the "American used car industry space" are reporting their quartertly earning reports and they are all good. Consumers in the last few months where rushing to by cars before the tariffs kick in. Coincidentally,the party may soon be coming to an end. Once again I realize that only a very few readers have any interest in options on these types of stocks however it is a facinating section of option trading to be watching.
.......
Now lets jump ahead to 11:21 a.m..
Notice the volume of trading in this option series picking up? After three days of rising prices more traders are starting to respect this stock. He is it's five day chart. The path forward is now unclear.
Is this softening of pricing a concern? Would I say to buy Puts? Not really.This looks more like a slight pause. I wouldn't be thinking about Puts unless something really scary started to happen. Now this.
Now a 1:00 p.m. reading. Things have gone flat. Something new must be factored into this equation. The markets will be closed this Friday and they close early tomorrow at 12:30 p.m.. There might be some action in the morning however many traders will be off on vacations so the morning action, if any will be shortlived.
If we look at other companies in the same space their stories are pretty much the same. I just listened to a "Lathia Motors " earnings conference call and they are upbeat about their path going forward.
Here are how the 340 Calls are sitting. Most traders will not want to hold these options overnight tonight. If the markets open lower on the opening they would be in trouble.
Here is how Carvana closed the day on a Wednesday.
Now the action on Thursday morning. It's Carvana. The stock did not disappoint the Call option holders.
Here is how the markets are doing at 10:30 a.m.
Option players still holding these Calls are braver than I would be. Now here are the closing prices on the 340 Calls and it's day trading chart. Notice the sharp sell off in the morning and the sharp rebound!
The spirit of Cavana was still alive.I helped that the DJIA had a strong day.
What is there to learn from this blog? Well holding Call options overnight going into the last day of the trading action is not a smart thing to do. If that's all you learned from this blog that's enough. On a different note, I think all of the stocks in this sector are reaching a peak. Why? Well, here is what others are saying.

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

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

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