Featured

Micron Technology. A Nervous Market With Big "One-Day" Option Swings

It's Friday July 31st. Look at this stocks one and five day charts and then look at how one series on Puts which expire today struck gold. First it's one and five day chart. ... I don't know much about this stock however this blog follows the last blog on the topic of buying Puts on spiking stocks. Look at how this one series of Puts below has reacted on this one day selloff. Had I picked a series of Puts further "out-of-the-money" the gains would be even more remarkable. Look at the low of the day which happened on the morning spike and look at where the option is at now! Yet wait the game is not as easy as it looks. How often does a stock drop that much in one day? Not very often. Look at how Apple dropped like 30 points after an earning's release and this series of "out-of-the-money" Puts merely doubled. It could be argued that risk involved in making the trade outweighed any potential reward. If we now go back to our friend, the stock name...
Post a Comment

So Caterpillar Has Another Twenty Dollar Price Swing In One Day

Here is it's chart on the day as of 3:37 p.m. There is recent talk of Trumph helping the farmers with bailouts..
It's a Thursday with options on this stock expiring tomorrow. I want to show you how some of the "out-of-the-money" Call options have traded today. First here is how the markets are doing in the late afternoon.
Now look at these three series of Call options. They are all "out-of-the-money" Call options.
What are the odds of ever catching this action? It would of have required the mentality to be willing to buy them on this morning's dip. That plus the stomach to purchase Call options which are "out-of-the-money" with only one day to go. It's not everyone's cup of tea. I get that. So once again, Caterpillar has had a healthy upsurge on the day. Would it make any sense to be looking at tomorrow's Puts? Well check out this one series of "at-the-money" Puts.
They actually look very reasonable in price. So the question now is why are so few trader's finding value in them? One reason is that if Boeing jumps a bit on tomorrow's opening these Puts could quickly lose half their value. Boeing's five day chart will now help to better put all of this into perspective.
Getting into Caterpillar Calls on Wednesday morning was the real way to go. Wednesdays are often reversal days. Option traders must learn to watch the markets for these types of moves. ** On a different note, think of the massive amounts of money made on today's Call options. I find it now strange that so few traders are willing to gamble on tomorrows opening. Let's check next weeks Put options with the same striking price to see if any of today's profits ended up going there. Here they are.
The answer appears to be not really. There was only one open contract outstanding going into todays trading session. This means no one had the appetite to be fighting this charging stock. I also get that. Let's see what happens tomorrow. The question is, are option traders smart to be avoiding Caterpillars potential to drop in price tomorrow? We will soon find out. To be continued. It's now 9:52 a.m. on Friday morning. Here are the next week out Puts.
What about the 625 Puts which expire today? It's now 10:00 a.m.
Now 10:18 a.m.
Now this.
Notice the volume of trading in these Puts. No one is catching this action. Yet another look just before noon.
If you have profits from catching this action maybe it's time to look at the upside. Look at how few option contracts have traded on it on the day.
To be continued sometime after the markets close today. Here is a look at how the 600 series of Calls traded on the day.
The 600 series of Calls jumped up to $13.94 at 1:23 p.m. Here is a final chart of how caterpillar closed om the day.
What a voyage it had!

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

News on Polestar , Lucid (Trading After A Reverse Stock Split) Plus Ford News And Vinfast

Image
Look at the one year chart on Polester. Now it's one month chart. What's going on? It's confusing. It was down $.36 cents on the week. If you want you can spend $.20 or $.25 on Puts and hope that the company goes under in the next five or six months. They recently raised more money by releasing more shares so it's running out of options. You can't run at a loss forever and this news will most likely scare off potential new car buyers. This actually is a low number of outstanding Put options. The consensus seems to be that it is not game over yet. Lucid started trading this week on a "one-for-ten" reverse stock split. Here is its one week chart. It was down $1.39 on the week. It's also going to struggle. Both of these stocks have challenges ahead. On a more positive note here is a chart that looks kind of perky. Ford on the week. The stock was down $.03 cents on the week and it was the 3th highest in share volume trading on the NYSE. It appears...
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