Featured

Eli Lilly - Expect Morning Moves Like This. Also Costco and Carvana

I don't like writing blogs about Eli Lilly. Why? Three reasons. It's option premiums are expensive and the stock makes giant moves. The third reason is that I know next to nothing about Eli Lilly's "day-to-day" operating realities. If I guess wrong, yes I say the word guess and I am not apologizing for using it, it's game over. Look at what happened this morning, a Tuesday. It jumped upwards after the opening and then sold off. ... The Puts traded down to $12.64 on the stock's early morning blip upwards and then nearly doubled in price on the ensuing decline. A second chart here below shows that action better. Buy the Puts just after the opening and sell them a few minutes later or wait and sell them at lunchtime. It's not only Eli Lilly that moves like this. Look at Costco today. It also was up on the opening and then tanked. This series of Puts moved up in price. Finally Carvana. The same story. Up on the opening and then tanking. .. If you ar...
Post a Comment

Exxon Has Just Had Like Four Days Of Going Up.

Exxon just broke it's previous three month high.
Now it's five day chart. The 117 Calls have doubled or tripled in the last two trading sessions.
Now it's chart as of 10:42 a.m. this morning.
Today is Wednesday. The markets are closing today at 1:00 pm., then closed tomorrow for Christmas and then open again for a full trading day on Friday. Now this. A look first the Calls which are $.30 cents "out-of-the-money" and expire on Friday.
Now the Puts which are already like $.30 "in-the-money".
Expectations are that the stock is going to go up and that there is still a full day of trading on Friday. Here is what the markets and what the price of oil are doing.
Can you see how traders have a preference for the Call options and are hoping Exxon continues it's natural progression upwards. They are prepared to pay somewhat of a premium to be positioned in this situation. I don't know what the outcome is going to be. Nobody does. As a reader can you see the complexities of trying to figure out this outcome? My point is that option trading on Exxon is a fair game. Let's watch and see what happens. Here is how it closed the day. Remember the markets closed at 1:00 p.m..
One thing to notice is the volume of trading today.
Low volumes means big stock movements are less likely to happen. Now Friday morning. Action in the first five minutes of trading. A slight dip and then a light recovery. The Puts didn't really drop enough to make the Put holders any money. Buying the 119 series of Calls on the opening or on the previous close created a double or triple! The 119 series of Calls opened at $.25 as the stock opened down and 72 seconds later was trading at $.70. You had to be buying the Calls right on the opening. There was no time to be messing around. This was a pivotal moment.
....
....
Imagine getting out this early in the day with a healthy return. Now this towards the end of the first thirty minutes of trading. Notice the volume of trading is next to nothing. The remainer of the day for what happens with this series of Calls and Puts has suddenly become inconsequential. The timeline for doing any further trading does no warrent putting fresh money into this position is no matter what the eventual outcome turns out to be. Yet hold that thought. There may still be a suprise.
Part of the allure of trading options on this stock comes from knowing that these types of pivot points exist. ** A late in the day update about one hour left to go.
The morning Puts we saw at $.17 crept back up to $.31 cents. Now two charts (with the first being the Puts) showing how both the Calls and Puts traded on the day.
Finally it's one day chart.
These are dangerous options to play, even for day traders. Morning reversals as of late are the norm.

Comments

Post a Comment

Popular posts from this blog

Waiting For A Drop On The Opening On Bad News - Eli Lilly

Image
Here is the bad news. The company is Eli Lilly. How bad is this news? Well look at it trading in the premarkets. So what do I think? I think the news is a setback of sorts, but not really all that bad. The stock is going to open lower, that's a given. It's like trying to play Boeing after an announcement that an airplane has crashed. So the stock is going to crash and it might have a small rebound and then it's going to slide down some more. A test of sorts will happen sometime in the afternoon. It might stock falling but then where will it go from there? The best case scenario is a recognition that investors got it all wrong and the stock ends up flat on the day. Yet there might be more of a downward dumping of the stock on the close followed by a selloff on tomorrows opening. Should option players be jumping in to play the upside on next week's Calls? That is the question. Here is a look at Boeing on the days after a crash. Day two after the crash was equally as ...
Read more

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slightly out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-ma...
Read more

Another Blog On "Vinfast"

Image
There is so much to read about this companies history online. Do your own homework. Their success is not dependent on what ends up happening with their sales in North America. They are nimble. There are plenty of auto factories all over the world now for sale they can acquire. They have dabbled in Australia. Having access to money to keep going doesn't seem to be their problem. Rivian also seems to enjoy this advantage. Vinfast is currently building a new plant in India which could employ thousands of people. That's an emerging new market. New relationships are being built and new investors will be coming onboard. Are option players looking at this stock? Not really if we look at these "one-month-out" Calls. What about Calls further out? What about next January? Here is a look at the three and four series of Calls. Nobody seems willing to bet Vinfast Calls. Now this. Here are two snippets taken from a blog I wrote about this stock back in early December of 2024. ...
Read more