Can You Play The Dips On $10.00 Drone Stocks With One Week to Go?
It's Monday morning. This is going to be a long and super speculative blog which has somehow caught my attention. Please try and get through it. Look at these three drone stocks and look at how their one week to expiracy options are trading. Drone stocks don't really make any money but the world is waking up to recognizing their military capabilities. Other countries all over the world also make drones. Trumph has helped to bump up the values of these companies in the first half of this year. It's all kind of a guessing game and existing shareholders need to get through this very current two or three day rough patch.
1)
Now here are two series of their Call options. Five days ago this stock hit $12.00.
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The interest here is only in the "out-of-the-money" Calls. Not many option traders at this point in time are trading these calls. There is a sense of being late to the party.
2) Draganfly. What a run it has had. The options on this one are set up differently. First they are set up in one month intervals and not one week intervals. This particular series of Calls we are watching will be expiring on November 23th. Secondly, the series of Calls are set up in $2.50 increments. This means that there are the $5.00 series of options, the $7.50 series of options and the $10.00 series of options. A move of .$50 will not move the needle much on any series of their Call or Put options because you are paying for the time factor.
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3) Unusual Machines. This stock reports on November 6th. That could cause fireworks. They recently raised a ton more money.It's dreams get bigger. With all of this new money there is more pressure on them to produce positive results.
Now here are the Monday dips I was refering to.
If you check out their highs of the year (see above) you will understand how volatile all of them are. All are trading well below their 52 week highs. PART TWO. We just saw everything selling off at 9:50.a.m. One lesson to learn is not to be to anxious jumping in on a falling Monday morning downtrend. What's causing it to fall is not going to change in a hour or two. Here is how these three series of Call options closed out the day.
1) Redcat.
Down 52% and 63%. 2) Draganfly. Another sizeable loss on one series of it's short term Call options. Down 47%. yet these ones still have a few weeks trading life left in them.
3) Unusual Machines. One series off it's Calls are down 53% on the day.
One thing in common with all three of these stocks is that it took about until 11:00 a.m. for ron all three of these stocks was reached. Tuesday gets worse.
A daily decline this time on Tuesday of 12, 10 and 8% on some of these stocks! All of this happened no real news. Can it get any worse? Let's look at these three option series once again. First Redcap.
. This time we are going to look at only one series of it's Calls, the $10.50 series. Yesterday morning they were trading at $.52. Here is how they closed on Tuesday.
Down another 71% on the day! Sometimes you see spikes in the trading volumes at the very end of the day. This time you don't. These are serious short term declines. The question is, are these declines oversold? Who really wants to waste money trying to find out? Now Draganfly.
The Puts shrunk in one day from $1.02 to $.65. Finally Unusual Machines.
These are all massive losses in all three of these stocks in a two day period of time. The ten series of Unusual Machines options will never rebound enough y the end of the week to be worth anything. On paper so much money is wiped out. I said these could happen in my blog of October 19th blog entitled "Drone Stocks On A Terror". Enough of this bad news story. Its now Wednesday which can be turn around days. Here is what I see happening at 10:17 a.m. Some of these stocks in this group have stopped falling.
Now I am going to suggest these two option series are worth considering for a high risk trade that have fallen off all traders radar screens. First
These Calls are "in-the-money" and are super sensitive to any kind of a bounce. People might say I a crazy to be watching for a slight rebound. The second stock is Unusual Machines. Remember once again that it has an earnings report coming out tomorrow which is a real wildcard factor.
Once again these options are "in-the-money". The third stock I am following is Dragonfly which I do not like as much for a rebound. I wouldn't be buying these ones. Here is it's chart and one of it's option prices.
Why don't I find value with these ones? Well these ones are the only one of the three that don't expire this week so they will not give you the same quick kick I am looking for. Let's see what happens.
Now here are two series of their Call options. Five days ago this stock hit $12.00.
....
The interest here is only in the "out-of-the-money" Calls. Not many option traders at this point in time are trading these calls. There is a sense of being late to the party.
2) Draganfly. What a run it has had. The options on this one are set up differently. First they are set up in one month intervals and not one week intervals. This particular series of Calls we are watching will be expiring on November 23th. Secondly, the series of Calls are set up in $2.50 increments. This means that there are the $5.00 series of options, the $7.50 series of options and the $10.00 series of options. A move of .$50 will not move the needle much on any series of their Call or Put options because you are paying for the time factor. 
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3) Unusual Machines. This stock reports on November 6th. That could cause fireworks. They recently raised a ton more money.It's dreams get bigger. With all of this new money there is more pressure on them to produce positive results. 
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