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Caterpillar Calls. Trying To Make It Simple

So if you like the stock Caterpillar and want to play the upside on it using options you could buy these ones. But why would you? They are up 46% on the day so the real money was made in buying them yesterday and selling them today. The stock would now have to go up about $25.00 in one month just to break even and everything above that price would be profits. If you now look at a thirty day chart you will see that's what it did last month. These are "one month-out" options which are ten dollars "in-the-money" and they trade in a different fashion than short term options. Yet that not what I want to talk about. I note that only 13 contracts traded on this series on the day and the open interest in them stands at only 11. What does this tell us? 1) It tells us that professional money managers are totally lacking in their understandings of the dynamics of option trading. 2) It tells us that retails traders are to some degree misguided by the learning materials ma...
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Is Boeing Going To Jump On The Opening Tomorrow And Will It Be Best To Buy In After The Market Opens And Dips?

The title is somewhat complicated. Here is Boeing's five day chart. It looks kind of ugly.
Remember it had earnings come out mid-week. Now we are in the situation where one series of tomorrow's Calls and one series of tomorrows Put options will be one day options. I am more inclined to wait and consider purchasing it's "next-week-out" Call options near Friday's close hoping for a rebound on Monday morning after this weeks dust has settled. In any event here now are two series of Boeing Calls going into Friday .
Notice that there is next to no volume in the slightly "out-of-the-money" Calls. Boeing's chart once again scares trader's away. One linguering question remains. Was it's earning's report really a bad one? Sometimes fresh eyes a few days after an earning's report can shed some new light on things. The small open interest in the 220 Calls is about two and one half times smaller than the interest in the 222.50 Calls. That's to be expected. Yet why is the interest in it's Calls, in general, so low? One reason is that the trading action is more focused on stocks with good earning reports. Also included into this mix is a look at the 217.50 Puts. If the market's tomorrow open and go sideways or down two dollars these Puts in the $.37 cent range with one day to go might suprise.
Let's see what happens next. Now this at 10:06 a.m. The Puts did suprise.
Now this at 10:14 a.m.
Look at the volume going into next weeks Boeing Call options.
Options traders find security in thinking ahead about better days. Now a late lunch time update. The Puts are now toast.
Boeing is rebounding.
The 220 Calls we looked at back at 10:13 a.m. are rebounding and actually hit a high of $5.10.
Going into the Monday morning trading with next weeks 220 Calls is a good space to be in.

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