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Going Out On A Limb. Exxon Calls.

Let's start with this. A five dollar drop is one of the biggest drops in days. These Calls don't have the strenght of Calls purchased at the close on Fridays which then give you the advantage oil prices shifting over weekend discontent. Let's see what happens. Here is what it's afternoon trading looked like on the day. It depends on what is said to be happening overseas. These Calls could jump on the opening. At 1:00 a.m. it was trading flat. Now a Wednesday report. There was no real bounce back up however the D.J.I.A. sold off at the end of the day. The 148 series of Calls hit a high of $2.95 and closed at $2.09 with the stock off 23 cents on the day. Trying to follow the Strait of Hormuz news is never easy to do and thousand of troops could be sitting ducks if things suddenly catch fire. One or two ships getting bombed would set off panic.These Calls still have two full days of life in them and anything could happen. These short term options are really a play on ...
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Why Exxon Options Are Changing The Game Of Option Trading

At least it is now in this current market environment. Look at it's one day chart today. Remember, options trading on it are set up in one dollar intervals. Can you see how it jumped up on the opening?
Now let me show you four ways traders could have made money trading this stock today. 1&2) A double happened right off the bat. Buy the 116 Calls at 9:30 a.m. and sell them at 10.00 a.m.. Or wait until 1:45 p.m. That would have also worked. 3&4) Buy the 117 Puts at 10:00 a.m. and sell them at 11:00. a.m. Or buy the 117 Puts at 1:50 p.m. and sell them at 3:55 p.m. Is it really possible to make three or four meaningful successful option trades on one stock in one day? I would say yes and in this case it helped that a double happened in the very first thirty minutes of trading. Sometimes the charts don't look like this. Let me give you this example from the opening of the trading session last Friday. From watching Exxon charts daily you will see a pattern of the stock having some of it's biggest moves in the first twenty or so minutes of trading.
Now this, let me show you how the 116 series of Calls that expire this Friday traded on the day. Nothing really crazy but they can sometimes move like 30% in price in a very short period of time.
Is there a secret to playing these options? It has to be a self learning process. What I have just illustrated is proof that what I have just talked about is real. Over the next couple of days I will hone in on more of this action. Why do so few option players play these options? I don't know however I could ask the same question about why so few traders trade Caterpillar or Deere options. Exxon is at a great price point which allows these options set up in one dollar increments to swing. ********** Look at this past five day chart on Exxon. Staying in option positions overnight is a very high risk. Playing the interday moves on Exxon requires a lot of babysitting.
To be continued.

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