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A "Love-Hate" Relationship With Pfizer Options

Pfizer options often disappoint however there are times when they can be your best friend. Let me try and explain. First look at it's five day chart. The 24.50 series of Calls have more than doubled in price in two days. Volatile stocks like this in this price range attract an inordinate amount of attention when it comes to option trading and it only flares up during these brief periods when the stock has these extreme price moves. Look at the open interest in this one series of Calls below. It's quite substantial. Now for a simple calculation. If the stock moves up today to $25.00 these $.37 cent options on the 24.50 series of options will probably move up to the $.55 cent range. Buy and sell let's say a block of 25 contracts and you will be rewarded with a nice gain. Now let we share this one observation. Here is a look at how the D.J.I.A. traded yesterday. It was down. Who wants to be holding short term Call options overnight if the markets are souring? Wouldn't t...
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When Caterpillar Goes Up Most Of The Day On A Tuesday. Can You Play The Downside?

It seems like a stupid question. Yet if you watch the stock climb all day it is something you might be asking yourself.
First you check out what the markets are doing at that point in time.
You could then check out what the markets were doing back in the morning.
Then maybe check out it's five day chart.
What about news? Here is all I could find.
So what are the Puts doing? Here is one series "out-of-the-money".
Caterpillar is still going slightly up. Is one of those let's pick a top moments? But here is the problem. If there was to be some profit taking before the close it wouldn't be enough to help the "out-of-the money Puts". Buying the "at-money" Puts would be to expensive if there was only a slight dip. The issue that concerns me is that institutional buyers are not afraid the buy into charging markets, even in the aftermarkets. All you can really do is pass in the situation and do nothing. ** The real action was on the 520 series of Calls which opened at $1.70 and went as high as $15.10. There was a slight dip on the closing.
The 520 Puts which were $4.20 at 2:40 p.m. ended up closing at $3.45. I wouldn't want to be holding them overnight.
Fighting strong stocks is a difficult game.

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