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A "Love-Hate" Relationship With Pfizer Options

Pfizer options often disappoint however there are times when they can be your best friend. Let me try and explain. First look at it's five day chart. The 24.50 series of Calls have more than doubled in price in two days. Volatile stocks like this in this price range attract an inordinate amount of attention when it comes to option trading and it only flares up during these brief periods when the stock has these extreme price moves. Look at the open interest in this one series of Calls below. It's quite substantial. Now for a simple calculation. If the stock moves up today to $25.00 these $.37 cent options on the 24.50 series of options will probably move up to the $.55 cent range. Buy and sell let's say a block of 25 contracts and you will be rewarded with a nice gain. Now let we share this one observation. Here is a look at how the D.J.I.A. traded yesterday. It was down. Who wants to be holding short term Call options overnight if the markets are souring? Wouldn't t...
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Mid Week Reversals On Short Term Options. A Topic Seldom Looked At.

As a writer if you get things wrong you quicky lose all creditability. I understand that. In a blog on Pfizer last week I looked at an entire week of it's trading activities of it's series of 25.00 Calls. The exercise was exhausting. This week I am only going to pinpoint one day of it's trading.
Today is Wednesday. Shown above is one series of Call options on Pfizer which only have two remaining days of trading life left in them before they expire. Most option traders dislike options on stocks in this price range for a number of reasons. Twenty five dollar stocks can wander aimlessly for extended periods of time. I get that. Then why would I be stupid enough to be looking at these Calls at this particular period of time? Two reasons. First, there is the chance Pfizer might rebound on the opening. Why? Well the DJIA closed the day down just shy of 500 points. Trumph does strange things which causes market swings. A rebound upwards could happen tomorrow morning for no reason if a more normal market returns. The second reason that Wednesdays are the one day of the susceptible to mid week reversal. Ai can explain this better. Type in "susceptible to mid-week reversal". That's what I would be looking for in this situation. Now this, it's one day chart.
Look now at the volume of contracts opened in the last 15 minutes of trading. Only 26. I don't understand why more traders aren't looking for a next morning bounce. Now let's move on to the following day and look at this 10:20 a.m. readout.
The $30 cent Calls (thirty dollars) are now $54 (fifty four dollars). That's the bounce I was looking for. Take your money and run before a sense of normalcy returns. Now this.
It's closing reading. It fell back close to where it was trading on the previous day.
This is an excellent example of a mid week reversal. Now on to other things.

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