Featured

Option Trading Strategies To Avoid.

Ford Call Options on A Monday morning that expire at the end of the week. Had you bought the Calls on it on Friday morning that expired that afternoon you would have made out very well. Here is what Ai says. Now this, the 12 series of Calls options on a Monday morning that expire at the end of the week. They took a slight dip. Here is it's Monday morning chart. Here is a look at the same options twenty one minutes later. Traders have bought in on this dip. Is this trading strategy, buying this weeks Calls on a Monday morning on a stock hitting a fifty-two week high a prudent thing to be doing? Is this a question of coming to the party to late? This is the concern. Why not purchase instead "in-the-money-Calls" with one month's trading life in them to go? That would be a safer strategy. Their next earnings report comes out on October 27th. Here is how other stocks are trading. It's a mixed bag. So now it becomes a waiting game and this is why I called this ...
Post a Comment

Powerhouse Options - Meta Platforms and Microsoft

In a July 31st blog I talked about two powerhouse stocks, Microsoft and Meta Platforms both with exploding earning reports. That day was a Thursday. Here now are their current five day charts.
Both of these stocks sold off today which is a Tuesday. The DJIA was down 61.90 points. On Monday they exploded upwards on the day as the DJIA was up 516 points. So where does that leave us now? Well it leaves us playing the direction of the indexes using these two stocks as pawns to make it happen going into mid week with three trading days left on these two series of options. Why? Well once again these two stocks are still in the "glowing in the spotlight stage" of last week's price movements. Ten dollars up or down in a day seems to be the norm and three day options serve well as a trading vehicle. (That lenght of time is a perfect fit.). Now this. First Meta.
Excellent liquidity and huge price swings. Now Microsoft. The same thing. Huge interday price swings.
At the prices of $570.00 and $313.00 these prices are doable. Let's see what happens. Now the premarkets on Wednesday.
Both are up about $3.00 which is enough to get out in the premarkets at a modest profit. Now this on the opening. First the Meta 765 series.(I am showing the 765 series by mistake, meaning to show the 770 series on the opening). The stock is up over $6.00. The 770 series is also up.
Now this at 9:52 a.m. Meta was up however has now lost most of it's gains.
........ The $570.00 price we were watching hit $895.00. however lost it's gains by 9:52 a.m. What about Microsoft? You can see now that mid morning it is down. $4.70 was it's high on the opening..
The DJIA is down 89 points after the first hour of trading. Is there a lesson in all this? If you are playing options on two powerful stocks that had amazing earnings last week and you are trying to play one day reversals after a down day, then try and get out in the premarkets. In the Meta Platforms situation you would be selling yourself short using this strategy however with the Microsoft example you would be better off. When you see premarket profits in two out of two postions just take it and enjoy trading in the rest of the day. Do you do premarket sell tickets "at market". I am afraid to, I pick a price I like. Why am I afraid to? Well you do not get a reported fill until after the markets open and you sometimes have to wonder if there is some trickery in how it all plays itself out. Waiting for a fill when the market is moving up or down is never a fun experience. The DJIA closed up the day 81 points and here is how the Meta Calls closed.
**** A final thought on the topic of Meta and Microsoft and five and ten dollar swings in one day. When the markets drop 600 points in one day there is a heightened change of the markets slipping again 200 or 400 points on the following opening. That didn't happen this morning and the little blip in the morning was nothing more than a reward for Call option holders willing to put money on the table at a risky time.

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