Featured

A Jumpy Week For Caterpillar - A Week With Earning Reports

Here is Thursday's trading on the day on Caterpillar. Here is how the $417.50 calls that expire tomorrow closed the day. Something happened this week. Caterpillar had a quarterly earning report come out on Tuesday. It's stock trading action survived this news unscathed. Here is it's five day chart as of the end of Thursday. Maybe the 420.00 or the 422.50 series Calls are better to look at? Here they are. But wait. Deere got clobbered today on the release of a quarterly earning's report. Why didn't Caterpillar sell off in price in sympathy? It shoud have. Deere sold off $34.70. For this reason alone I would be more inclined to purshase the Puts. Here is the series I would consider. To be continued.
Post a Comment

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

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 bad as day one after the crash. Here is a look at a Tesla sell off situation, this time on the day after Musk announced he was going to form a new political party.
My point is that rushing in to buy on bad news isn't a very good strategy. Let's watch and see how this Eli Lilly bad news story plays itself out. It's now 8:53 a.m. The first premarket printout was around 8:35 a.m. It's premarket price continues to go down. Down like another $6.00. Some traders are watching this looking for a reversal in this downward slide. At this point in time there could be one. That's another twist to this story.
Now a 2:00 p.m. update. The stock is now a heck of a lot lower than it was on the opening.
It's amazing how they can hold a stock so flat after a major decline. Now a different topic. Here is how the one-day, "at-money" Calls were trading at 9:57 a.m. this morning. It would take guts to be holding this series of Calls. Yet with the stock at this time now being down over $100.00 per share I can understand how they would be somewhat attractive.
Now at look at how they are trading at 2:41 p.m. They are down but not out. The volume in them might start to increase between now and the closing. That is something to watch.
Here is how the 650 series of Calls were trading at 3:56:00 p.m. with a modest more contracts being added in the last 1.75 hours.
Now this, the number of new contracts added in the last three minutes of trading -129- contracts with the price jumping up slightly. These options are almost $10.00 "out-of-the-money". The game continues.
A NEW QUESTION. Do you find all of this to be exhausting? It is from the point of view that there are hundreds of stocks trading out there concurrently, each with their own stories. FRIDAY MORNING. A look at the premarkets at 8:47 a.m.
That's going to do wonders to the 650 series of Calls on the opening. Well at least get them to jump up from the $4.00 range. To be continued in my next blog.

Comments

Post a Comment

Popular posts from this blog

Living on Kraft Dinner?

Image
What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
Read more

The Little Engine That Could

Image
Walmart again. It's all I seem to blog about. Here is it's five day chart. The stock keeps going up and the option series are set up in one dollar spreads. Even a fifty cent move on the stock moves the needle on these Calls. Look at how this series of Calls was trading yesterday at 3:00 p.m.. Now here is this same series of Calls just before noon today. Thirty days of upward action like this punctuated by the off day of decline. Now notice the higher volume of trading in the series of Calls with the higher striking price. These are the ones's with more leverage. At the same time look at the five day chart on Costco. The two stocks sometimes trade in tandem. Humpty dumpty sat on a wall .... a had a great fall. Someday soon a fall might happen but what a great ride it has been.
Read more

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