Featured

How To Avoid Time Value Traps With Last Week Options.

This blog is not going to be an exhausting study of this topic. I just want to show you a few charts found in recent blogs and comment on which ones seem to skirt the issue of "time-value-concerns' and which ones don't. 1) Avoid Thursday at the close Call options. In this case Thursday is the second last day of the above chart. If you guess the wrong direction on the close it's going to be game over on Friday when the options expire. Thursday at the close on options that expire the next day are the biggest time value traps you can buy into. If the stock moves in the wrong direction it's game over. 2) Ford on a Monday going into Tuesday. On this chart April 13th is a Monday and Tuesday is the 14th. Can you see Ford closing strong on the close of the 13th? It would make sense to get in on the stong closing because these Calls would still have four trading days to recover if Tuesdays opening was not all that spectacular. 3) This time it's Caterpillar and it...
Post a Comment

What Business Do You Have To Be Playing Exxon Options?

The world is politically unstable and Exxon jumped on the opening. Can you jump in and play it for the downside over the next two days? The real money was made by option traders who jumped into Call options yesterday before the close knowing that Trumph was ramping up his rhetoric on pushing around Greenland. His talking last week about getting involved in the Venezuela oil markets pushed up Exxon and Chevrions stock prices. Here are their five day charts.
...
Now consider this. A bet on the Puts to make you money over the next two days puts you in the driver's seat on playing the downside. Would this be a reckless trade to make or one that shows your wisdom in calling Trumph out on his reckless path of destruction? You decide. Now this.
What this shows are how "out-of-the-money" Exxon Calls reacted to this morning's opening. What a nice return to it's call holders.. Might things cool of a bit over the next two days? Here are the Puts that expire this Friday. Would you be willing to jump in now to play the downside? It would be a play on Exxon losing the gains it made today. Just below I will show you how the indexes are now trading.
Wait. The markets are up and Exxon is up. There is really no point in buying the Puts now. Exxon might continue to go up for the rest of the day with the markets rebounding. A 3:30 p.m. perspective might be more inviting for an entry point to play the downside. Here is a 3:38 p.m. look at it's five day chart.
Now at 3:30 p.m. buy in point.
The stock might lose some steam buy the end of the day or could open lower on the opening. All I know is that today was a strong day on the markets and this morning wasn't the right time to be looking for a reversal. A one dollar drop on tomorrow's opening would do wonders for this postion. The takeaway this time is not to fight oil stocks on strong days looking for interday reversals. With oil stocks, once the momemtum sets it usually takes an overnight occurance to create a reset in the market's thinkings. That's the way I see it anyways. Here is how the Puts were trading in the last second of trading.
Here is how they closed. Ninety nine more contracts traded in the last twenty seven seconds at a slightly lower price so someone was dumping them.
Let's see what happens. Thursday morning. It worked.
Exxon can be your friend. **** Now here is the five day Exxon chart at the end of the week on Friday morning. It continues to charge up.

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

News on Polestar , Lucid (Trading After A Reverse Stock Split) Plus Ford News And Vinfast

Image
Look at the one year chart on Polester. Now it's one month chart. What's going on? It's confusing. It was down $.36 cents on the week. If you want you can spend $.20 or $.25 on Puts and hope that the company goes under in the next five or six months. They recently raised more money by releasing more shares so it's running out of options. You can't run at a loss forever and this news will most likely scare off potential new car buyers. This actually is a low number of outstanding Put options. The consensus seems to be that it is not game over yet. Lucid started trading this week on a "one-for-ten" reverse stock split. Here is its one week chart. It was down $1.39 on the week. It's also going to struggle. Both of these stocks have challenges ahead. On a more positive note here is a chart that looks kind of perky. Ford on the week. The stock was down $.03 cents on the week and it was the 3th highest in share volume trading on the NYSE. It appears...
Read more