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Lucid. Options On $6.00 Dollar Stock With Two Days To Go Are Difficult To Trade

What do you think about this chart? It's one of those falling of a cliff charts. It's a Thursday morning and it looks like this stock is kind of in a downdraft. Look at my most recent blog on Rivian. The bad news on Lucid could be a hangover effect caused by Rivan's one day prior bad news story. It was talk about Rivian going back to the markets to raise more money even though they were starting to lose less of it. It was a good-news, bad- news story. A story which would take a few days for the markets to digest. Let's now look at two series of Lucid's Calls which expire tomorrow. We now find ourselves forty one minutes into the market's opening trading action. The 26 series of "out-of-the-money" Calls that expire tomorrow are trading last at $.03 cents. ... Now this. Now look a this small rebound twenty five minutes later. .. Here is where it gets a touch confusing. The $5.50 Calls which were once at $.22 cents are now $.30 and the $6.00 series of...
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Caterpillar Jumped $32.09 On The Week

Not a bad week.
Here is how it traded on Friday. It was up $7.28 however it was losing steam towards the end of the trading session.
Here is how one of it's Call option series traded on Friday.
A couple of comments. Look at the low interest in the outstanding number of option contracts in this one series shown. Option traders don't like trading them. Their earning report for the quarter doesn't come put until Oct 29th. Earnings per share this year are expected to be around $18.00 per share compared to $21.00 in 2023. Caterpillar is helped by interest rates coming down and the increased interest in mining actitives and AI biulding infrastructure projects.How true any of this? One can only guess. The stock Deere and Co. in contrast was down $1.11 on the week. Farmers are in trouble.
Now let's look at Caterpillars 30 day chart.
Now a look at these three series of "out-of-the-money" Puts that will expire at the end of this week. No one is wanting to trade them.
It's hard to fight upward sentiment. Now this, a readout of one of next weeks "in-the-money-Puts".
Five trading session ago Caterpillar was trading at $470.00. Charging stocks like Caterpillar are difficult to play on the downside. So few option traders want to play it on the downside. Now this, a look at one series of Puts that traded On Friday Oct. 3th. If you look at it's one day chart you will see that it sold off between 12:45 p.m. and 2:15 p.m. Around this 12:45 p.m. time period the 500 series of Puts sold off to their lows of the day down to one cent a contract! There was an opportunity profit on that mid day slide.
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It's only on a Friday that one day moves of this magnitude would have such a direct effect on the trading patterns of short term options like this. But who would would be brave enough to purchase Puts $5.00 "out-of-the money" with only three hours of trading time left in them? If Caterpillar jumps again on Monday morning expect to see some traders starting to think about looking at the downside action.

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