Featured

Step Down Charts And Short Term Options. Nio

Here is a classic "step-down-chart" with one minute of daytime trading life left in them before the markets close at 4:00 p.m.. The stock is Nio. ... This printout of "in-the-money" Call option also shows one minute of trading life in them before the market closes. It's Tuesday and these Calls expire this coming Friday. You are purchasing three days of market trading life. To purchase one thousand shares of this stock would cost you $5,750.00. To purchase options that control the price movement of one thousad shares of this stock for three trading sessions would cost you $370.00. ( Ten contracts at $.37 each). These Calls are also currently $250.00 "in-the-money" which means if the stock totally goes flat for the next three days your options will still have that amount of intrinsic value left in them. Now think about this. Many option accounts in the U.S. enjoy free option trading and there are discount brokers in Canada who can save you money. A fl...
Post a Comment

Boing Going Into A Friday

Let's start with the late Thursday afternoon activity.
This chart shows the daily trading activity up until 3:42 p.m.. The one bump upwards today augurs well for tomorrow's potential move. Yet then again that is just a random thought.
Now let's look at how they closed the day on Thursday and how much more trading happened in them between 3:42 p.m. and 4:00 p.m. 171 more contracts were added just prior to the closing bell.
Let's watch the action on the opening. Here is Boeing's now current five day chart as of the close of Thursday.
* Boeing jumps overnight..
Here, shown below around 9:00 a.m. is how the stock was trading in the morning premarkets. It was up about $1.50. What does that make these options worth in the premarket? $2.10 plus $1.50 or $360.00? The answer as you will soon see in not quite. In premarket trading there is always some slippage which should be factored in.
Now let's skip ahead to the Friday 3:00 p.m.the deadine when retail option traders must liquidate their "last-day" expiring options. These number might suprise you.
Boeing disappoints. Now this, a Friday afternoon summary at 3:00 p.m. of how the 215 Calls where trading at, plus it's then current one day chart. The high on the day for these 215 Calls happened in the first few minutes of market trading.The high was $3.15.
........................
Was this blog a waste of time to read? Not really, consider these points. 1) Look at the low on the 215 Calls on Thursday. They traded interday as low as $1.26. Call option players had the opportunity to make money trading them also on that day. 2) If you see a stock trading $1.50 higher in premarket trading you should realize you can get out of them, even "at-market" and walk away with a win. 3) Use this example of this $1.50 price gap at 9:00 a.m. to gauge what price you should submit with a premarket sell ticket if you decide to sell. As one gets closer to the market's opening these upward premarket gaps often get whittled down. 4) As mentioned in previous blogs you will sometimes see stocks trading like $4.00 dollars more in the premarkets, only then see them trading relatively flat on the opening. Keep your eyes on the Call options on these stocks to see if start to rebound back up again in the event of any strenght coming into the markets. One final thought. Some option traders get annoyed to sell out in the premarkets at a modest profit, only then to watch the stock they just sold their Calls out of rally ten or fifteen dollars on the day. You can't have you cake and eat it. *Now this, the 215 series of Puts on the day. The chart below in red better explains this action.
Buying Puts just after the early strength on the opening and getting out with a profit about an hour later was a different way to play this same situation.

Comments

Post a Comment

Popular posts from this blog

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

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

News on Polestar , Lucid (Trading After A Reverse Stock Split) Plus Ford News And Vinfast

Image
Look at the one year chart on Polester. Now it's one month chart. What's going on? It's confusing. It was down $.36 cents on the week. If you want you can spend $.20 or $.25 on Puts and hope that the company goes under in the next five or six months. They recently raised more money by releasing more shares so it's running out of options. You can't run at a loss forever and this news will most likely scare off potential new car buyers. This actually is a low number of outstanding Put options. The consensus seems to be that it is not game over yet. Lucid started trading this week on a "one-for-ten" reverse stock split. Here is its one week chart. It was down $1.39 on the week. It's also going to struggle. Both of these stocks have challenges ahead. On a more positive note here is a chart that looks kind of perky. Ford on the week. The stock was down $.03 cents on the week and it was the 3th highest in share volume trading on the NYSE. It appears...
Read more