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One Day Puts On The Stock Eli Lilly At 2.31: p.m. On A Thursday Afternoon

The DJIA is up something like 850 points on the day. Eli Lilly has jumped $50.00 on the day. Happy days are here again. If the markets cool on the opening tomorrow (Friday) could the stock give up some of these gains? If so what would these Puts do? Might the stock give up 25% of what it gained today? Now it's five day and one day chart. $850.00 for a Put on a stock that has jumped up over $50.00 in one day. It's a Put that expires tomorrow. Is this a recipe for failure? At 2:42.00 p.m. the DJIA is up 899 points. Now the action at 2:47:00 p.m. Now this. In at 2:31 p.m. if you like at $850.00 and out 38 minutes later at $1,100.00. That's a gain of $250.00 and all you did was skim a small gain off a hot market. Maybe that could be your trade of the day to avoid all of aggrevations of what might happen next. It would be catching the tail end of a 950 point one day rally. That in itself is not a bad strategy. Now a 3:30 p.m. update. Another small gain. Let's see what ...
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The DJIA Index Down over 900 Points With An Hour Left In the Trading Session.

If it wss down 600 points at this time in the trading session and not down over 900 points you might expect to see a slight rebound in the final half hour of today's trading. That doesn't seem to be the case. The over 900 point drop in the indexes adds an element of scare. Now Caterpillar which is down over $19.00 on the day. Would this be a good time to catch it for a rebound? Is has being a particularly strong stock as of late. Might it be one of the first stocks to rebound after today's train wreck of a day?
Look at the 625 Calls that expire at the end of the week. Only five contracts have traded on the day. Traders are not rushing to buy back into it looking for a strong close. Yet they are more interested in the Call options on it about ten dollars "out-of-the-money". They cost less but will be slightly less sensitive to only a one or two dollar rebound. They need more of a bounce in the stock's price. Here they are.
Now here is Caterpillars one day chart as of 3:30 p.m.
The stock is creeping up as the index appears somewhat steadfast in it's ways.
Now these two readings at 3:32 and 3:34 p.m..
...
In the last 25 minutes or so only one contract traded in the lower series of Calls and only ten contracts traded in the "higher-out" series of Calls. At 3:42 /3:43 p.m. the action continues.
....
Let's come back to the action around 3:58 p.m..
Here is Caterpillar's one day trading chart.
$9.28 to $11.00. It's not much of a trade but the results are in line with what one would expect. The risk of staying in this position is that the markets could drop again on tomorow's opening. In these kinds of markets it's best not to be holding "last-week-to-expirying-options" overnight. *** If you had the guts to stay in overnight here is how the 635 Calls are trading on Wednesday morning.
There was a bit of a jump on the opening but it's still early in the day. Now this just over an hour later..
To be continued.

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