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One Day Boeing Puts On A Friday

It's 9:56 a.m. Now it's five day chart. This is where it will get interesting. Notice it has a rebound off a soft opening? Traders who used the 212.50 series of Calls on Boeing's soft opening were already well rewarded. Here is what the indexes are doing. So that's it. You could wager $100.00 U.S. plus commisions for one contract or multiples thereof and walk again. It's a bet on your abilities to recognize chart formations. Now this. If you bought in and a small gain materializes in a matter of minutes do you take it? Sorry. It's now 10:46 a.m. There is no gain. That opportunity never presented itself. In fact these $1.00 Puts we were once excited about dropped down at one point in time to $.42. .. If you signed up to be part of the action can you see the mess you are now in? Here we are seven minutes later and things for these Puts are starting to get a touch better.That's how quickly things can move. Can you see at this point in time how dangerous ...
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" The Respect That Boeing Options Command." Part Three

In a recent blog (on Oct 1st) I said if you bought short term Call options on Boeing on a Wednesday and earned a profit that day, just take it. I also said don't buy Thursday Boeing Call options hoping for a Friday morning "Boeing bounce". Friday option playing can be done on an hour-to-hour basis looking to go against short term rises or dips. Then there is the startegy of buying Call or Put options on the stock on Friday near the close looking for a Monday morning bounce. Most traders using this strategy are looking for an upwards bounce. Remember in this case on Friday, the markets closed down well over 800 points and the Boeing stock took a hit. It would have taken courage to be thinking of jumping in at this point.
Shown above is Boeing's five day chart showing the big drop on Friday and the rebound on Monday.
Yes you could say that it's an expensive trade to get into for a gain that is not all that significant. The gain on Monday was like 39%. (One of the reasons for Boeing getting knocked down last week was the news of a possible cancellation of some airplane orders). The truth is Boeing can't build them fast enough and the reason for the possible cancellations had nothing to do with the potential buyer not needing them. The demand is still there and still growing all the time. Tuesday was a nothing day with Boeing off $1.26. In a blog I wrote last Thursday on Boeing (Oct 9th) I suggested buying the $217.50 "one-week-out" Call options over the "one-day-out" Calls options. Friday's markets were a blood bath and the markets, as measured by the D.J.I.A index dropping 873 points. The one day to expiracy Calls which I said to avoid expired worthless. Now let's move forward. Here now is how those "one-week-out" Call options from last week where trading back then.
Here is how they ended up closing today on Monday.
While they are now still down in price by a significant amount they now have four more trading days life left in them. My point being is that "next-week-out" options, while expensive can still turn out to profitable trades. Let's continue to watch these ones. Here now is Boeing's thirty day chart.
Now Wednesday morning. The clock is ticking.
Thursday at the close is even worse.
To be continued.

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