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Eli Lilly

When a stock drops over $50.00 in the first three hours on trading one a day and when the DJIA index is up can you play it for a one or two day partial rebound? $9.00 or nine hundred dollars gets you in. That's the question now being asked and based on the number of new Call contracts being purchased the answer is probably no. As of 11:50 a.m. I can't find any news to explain this drop. Now this, if you just came off a morning gain from trading Tesla Calls, see my last blog might you be willing to part with some of these winnings? This could be another short term opportunity given that the D.J.I.A is so strong. Lets check out the action in thirty minutes. The stock is up $3.81 and the Call options went from $9.00 to $11.80 in thirty minutes. Do you take the money and run? Very few traders are speculating in this series of Calls. There is the danger that in this kind of situations that a second shoe could drop at any minute. Yet the DJIA continues to remain positive. That sho...
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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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