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Tesla And One Of The Busiest Option Games In Town.

Here we are on a Friday morning with the DJIA index down over 1,000 points in the last three days of trading. Now look at Tesla's one and five day trading charts. Now at look at this series of Calls. Might Tesla suprise to the upside on the day? Now this, how the indexes are doing at 11:15 a.m. They are only a tad better than when we first looked at them. .. Knowing that Friday afternoons can be a rough ride do you take a modest profit and get out? We did afterall miss the low of the day in this option series and part of the mini ensuing rebound. I would. Now this at 1:41 p.m. just under two hours later. The party for these Calls is over. This was a bad week for the markets. A short part two. Can you buy Calls on Tesla at $2:00 p.m. that expire at $3:00 p.m. That's the time of the day these options expire on a Friday even though the markets keep trading to 4:00 p.m.. Here they are at 2:04 p.m. This time we are looking at a different series of Calls with a lower striking pr...
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Nvidia Has Two Day Options And Four Day Out Options

Let's start with a printout of differing expiracy dates. That's something I never pointed out before.
Most stocks are not set up to trade this way. In theory this gives you more versatility in playing short term options on any particular stock which offers this feature. You can for example buy a Call option on Nvidia which expires on Friday and sell one that expires before that on Wednesday in the hopes that the stock dips on Tuesday and Wednesday and recovers on Thursday and Friday. What does this mean? Well purchase for example a Friday's Call for $4.30.
Then sell this Call shown below for $3.20. How much will this cost you? Well $430.00 goes out of your account (plus the commission) to cover the cost of the longer term option and $ 3.20 (less the commission) is credited into your account for selling the shorter term Call (which has the same striking price and which you hope sells off in price) for a net difference of $110.00 plus the two commissions.
Now it's five day chart as of Monday's closing. This chart is not something you would expect to see and castes a doubt on the exercise we are describing.
But wait. Why try and create such a complicated situation? One reason is that you are trying to create a situation where the time value works in your favor as you watch the short term Call option you are holding slip down in price while the longer term call option remains slightly more resilient to this movement. I will walk you through how this plays itself out. Now this. Look at todays action on the Feb 4th 190 Puts. Look at how quickly they went up in price at the very end of the day.
This type of a move challenges the wisdom of creating the complicated spread we have just talked about. To be continued. ** Now this, a look at Tuesday's action. It dropped about $10.00 and then came back up to be down just over $500.00 on the day.
The 185 Calls that that once traded at $3.10 (that now expire tomorrow) traded down to $.25. They could have being purchased back to create a profit of $1.85. The 185 Calls which were trading at $4.30 and now have three trading days left in them are now trading at $1.58. That's a loss of $272.00!
. At this point in time the odds of getting back your money doesn't look to be very good. To be continued. Now Wednesday's action. Nvidia crashes again.
We are now left with the one 185 Nvidia Call option which now has a value of only $.26.
Can Nvidia jump $10.00 or more in two day? Not likely. To be continued.

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