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Do You Have To Be A Wizard To Play Exxon Mobile Options? You Decide.

Look at this chart. It's Exxon's one day trading chart of last Friday. Zoom,zoom, zoom. Here is it's five day chart. Shipping oil on the high seas is becoming more of a game of cat and mouse. Looking at the above five day chart would you want to holding this weeks 135 Calls starting the trading session on Monday morning? Here is how the 135 Calls closed the week. Now this, the premarkets on Monday morning. You can't trust these numbers. Sometimes the hype burns itself out before the markets open. At some point in this process the following news ws being assimilated. Now this. Exxon jumps on the opening but not that much and quickly gives up some of that gain. Now this. The Calls are up 25% in the first three minutes of trading. That's something but not bad if you bought in at the closing seconds of Friday's trading session. Are traders now rushing in to buy the Puts? Not really. Exxon Mobile commands respect. Now this at 9:57 a.m. Exxon is now down...
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In These Times Option Trading On Caterpillar Is Near Zero

When you see Caterpillar drop over $21.00 dollars in one day with an earning report soon to be coming out what does that tell you? One could speculate that some institutional traders who own 71-72% of the outstanding shares are selling their shares and saying thank you for a good ride. Get out before it's earnings come out.
It's a double in price in less than one year event. It could be said that the reason it has gone up so much is because everyone is waiting for the war in Europe to come to an end. The equipment that Caterpillar produces will be needed in the ensuing rebuilding process. This is forward thinking which has little to do with this years earnings. Now this printout.
Friday's volume of trading in this one series of Call options was 100 contracts. That's a suspicious number. It could be one institutional trader trying their luck on selling short fifty contracts on this one series of Calls to then close them out later in the day. That would be a straight forward strategy to employ. Caterpilllar is a stock void of news releases and general chatter. It is a stock seldom in the news for lawsuit issues. Now shown below is the action on Caterpillar Puts on Friday morning at 10:16 a.m. I have a beef with the spreads in the option pricings of these "near-to-the-money" options .
I see a spread on the "bid-and-ask" of $3.45. This makes it difficult to buy into and sell out of if you are looking for the stock to drop another two or three dollars or if you are looking for an interday reversal in the stock's price of the same amount. In contrast stocks like Exxon or Walmart have very tight spreads on their "bids-and-asks". Even a one dollar swing in either of these two stocks could create a profitable "get-in" and "get-out" trade. Now the closing readout of the same 642.50 series of Caterpillar Puts. The stock kept dropping on the day.
Here is Caterpillars five day chart.
It's 90 day chart is now also appropriate to look at.
Option trader's in general are looking for easier trading opportunities. What do I expect to see from this weeks earning numbers? Maybe a squeeze on the profit numbers with tariffs making it more expensive to build things. Yet the good news is that for the most part they can pass on these costs to some segments of their end users. "Caterpillar 797 mining trucks" are now in high demand by gold mining companies. They can afford to pay anything to get them.

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