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What A Week For Market Swings. This Time Boeing

My last two blogs have focused on options expiring on Mondays and Wednesdays. This blog on a Thursday deals with options that expire tomorrow on Friday. AS A GENERAL RULE PURCHASING CALLS ON A THURSDAY MORNING THAT EXPIRE THE VERY NEXT DAY IS NOT A SMART MOVE TO MAKE. We have witnessed huge daily price swings this week where profits from option trading can be made in a matter of hours. Now let's look at Boeing's morning action. Sometimes when you see charts like this and if you're coming off a streak of three or four profitable trades it's best to jump in hoping for a reversal to the upside and ask questions later. Especially when the D.J.I.A is strongly up in price as it was. I quickly looked around and couldn't find any news to account for this price drop. Trumph was in China and we later learned that there was talk of China ordering 200 more of Boeing's new airplanes. Talk like this is only talk. Now this at 9:51 a.m.. The interest in this particular series...
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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.

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