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Part Two Of What McDonald's Is Doing?

Nobody knows whats going to happen tomorrow. Let's jump forward. $1.64 or $164.00 dollars plus commissions will buy you one "310" series of Puts. In the first twelve minutes of trading only one contract traded. That just shows you how dangerous these option contracts can be. We are not talking about a one day move at this point in time. For option traders holding positions like this which were bought for quick flips an hour of watching the stock becomes a guessing game. Here it is now about seven minutes later. Note this, the pain continues? What's the DJIA doing? This becomes the path you are now on and it's to early to think about it becoming a dead end. If you still like the situation then yes you should buy more if you can afford to lose. Perhaps you made a big score on Disney Calls on the previous day. I have talked about that. Now this at 11:09 a.m. Still the same number of contracts traded. Hold these thoughts. Look at how the 310 Puts and the D.J...
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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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