Featured

Is Tesla A Good Robot Play?

There's going to be pushback if Musk decides to turn his auto production lines into robot making production lines. That's a new fear. It is also noted that used Teslas are dropping in value quickly. Tesla was down in price $5.62 last week. How is Musk going to make this new venture work? Might his first generation of robots like his cybertrucks quickly become obsolete? If you think about it, maybe existing shareholders are already lightening up on their stock positions knowing that a bumpy ride could soon be on the horizon. Now a new topic. How much do the "three-month-out-Calls-and-Puts" on Tesla cost? That's a fair question and here is the answer. Now we also need to look at how it has traded in the last three months. The stock is down about $60.00 over that period of time. Anything is possible with these three month out option series. Now this, Tesla drops on the Monday February 23th opening. The markets are having a bad day. Look now at what the May 26t...
Post a Comment

Tesla Calls That Expire In 55 Minutes At The End Of The Week.

First Tesla's five day chart going into Friday's mid afternoon. It's January 2nd on a Friday. Is it time to make another trade to end your week? Can you trade Telsa options that expire in one hour? How stupid can you be? That's one way to look at it. You can see it jumped upwards on the opening and then lost that gain. It is now off over $20.00 from it's morning high.
On the surface it appears that there there is no quick way to make money on this situation. If there was everyone would be playing them. Hold that thought. Look at these Calls which now expire in 55 minutes (for retail traders on Friday's last day to expiring options expire at 3:00 p.m. and not 4:00 p.m.) and look at the open interest number from the previous day.
Why does it only read 290 contracts. Doesn't that number seem small? Well it has to be remembered that yesterday the stock closed just over $12.00 higher in price than where it is now so these were at that time expensive "in-the-money" Call options at the start of the day and Call holders where at that time hoping for a quick bounce which then happened. Lucky option traders may have played the stock both upwards on the opening and then downwards on the rest of the day. Let's look at the 450 Calls and see what yesterdays closing interest was.
The open interest in these more affordable "at-the-money" contracts on yesterday's close was just shy of 6,000 contracts. Yes the interest in playing "one-day" to expiring Telsa options is huge. So at this time of the day the damage to the morning's Calls is done. The overnight Call holders had the chance to cash out with a decent profit in the premarkets or in very early minutes of trading and even greater profits if they switched gears and used the Puts to play it the opposite way. Tesla sometimes trades like that. Let's now look at it's one day chart in the mid afternoon.
It's had a four hour straight drop. Look at the $437.50 series of Calls at 2:05 p.m. now trading at $1.45. Guess who would be buying them at this point in time? Traders who are triple dipping, meaning the traders who sold out of their Calls in the first minute morning rally and who then picked up some Puts and who have now sold them out. Such a strategy sounds complicated but it really isn't. If they win or lose on this last little trade it really doesn't matter. They would be wagering only part of their gains. At 2:47 p.m. you can say thank you to the options bought at 2:05 p.m. and cash out again.
$1.45 to $3.95. In once again at 2:05 p.m. and out at 2:47 p.m.. Almost 15,000 contracts traded during that period of time. A message to my readers. My hope is that this blog is a wakeup call. Tesla last day options can be one of the most powerful trading vehicles on the DJIA exchange. Here is how the 450 Calls traded on the day. The high of the day was at 9:31 a.m. as it popped on the opening.
Now the 437.50 Calls.
This last chart shows best the 2:00 p.m. rally. Not all Friday's are this volatile.

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

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

Another Blog On "Vinfast"

Image
There is so much to read about this companies history online. Do your own homework. Their success is not dependent on what ends up happening with their sales in North America. They are nimble. There are plenty of auto factories all over the world now for sale they can acquire. They have dabbled in Australia. Having access to money to keep going doesn't seem to be their problem. Rivian also seems to enjoy this advantage. Vinfast is currently building a new plant in India which could employ thousands of people. That's an emerging new market. New relationships are being built and new investors will be coming onboard. Are option players looking at this stock? Not really if we look at these "one-month-out" Calls. What about Calls further out? What about next January? Here is a look at the three and four series of Calls. Nobody seems willing to bet Vinfast Calls. Now this. Here are two snippets taken from a blog I wrote about this stock back in early December of 2024. ...
Read more