This is a long blog but try to stick with it. The good stuff is near the end. I am referring to what happened to one option series on Thursday afternoon which is the essence of short term option trading. First the five day chart.
For this chart to have more impact let's look at it back to the day it really jumped.
Is this good news substainable? Here now is it's 1:07 pm Tuesday look at the action.
It's moving up again. Here is what the D.J.I.A. is doing.
Now this the Puts at 1:06 p.m. These are the 70 series of Puts which expire this Friday. Today is Tuesday.
The volume in them is next to nothing. G.M. is going up. It seems kind of stupid to be thinking about them going down. Yet a lot can happen in three days. Here is how they closed the day.
Here are other "out-of-the-money" Puts.
Let's watch and see what happens. Let's start with the 68 series on Wednesday at the close. They held their ground as G.M. was off a touch.
What about the 67 series? Not much different but the time value is becoming more of a concern. Yet a two dollar drop would do wonders.
Now the 66 series of Puts. A stong upwards opening on the stock tomorrow will wipe these ones out and a three or four dollar drop is necessary to bring some life back into these ones.
Here is what G.M.'s stock now looks like.
Two days is a long time in option trading. Now for a look at Thursdays closing action on the puts we are following. We are down to the wire on these Puts. The one little dip G.M. had one day this week was a reaction to the announcement of 1,000 or so workers getting laid off in a Detroit area electric vehicle making factory. That news was quickly discounted as it was looked at as being a cost savings measure. G.M. loses money on each E.V. it makes. Now Thursday at the close. Let's start with the 68 series of Puts. Back on Tuesday they were trading at $.30.
They did reach a high of $.33 so you could of have gotten back your money if you are tired of this ride. The other out of the money Puts are not doing as well. Here they are.
Here is G.M. closed the day. A soft opening on this stock tomorrow would do wonders.
Look at how cheap the 68 series of Puts were at one point today.
In the last three hours of trading the 68 series of Puts went from $.09 to $.25. That was one of the opportunities of the week to make money. These were the "near-to-the-money" Puts as G.M. lost some steam near the closing of the day. The above two charts show how this happened.To be continued. *** Friday was a bust day for anyone holding any of these Puts.
What are the takeaways? First it's difficult to fight strong stocks in upward moving markets. Second, Thursday afternoons are periods of time when nervousnes can come into the markets.
Comments