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"End Of The Day" Friday Option Trading On Tesla

Back on April 2nd I did a blog called "Two Hour End Of Week Option Trading on Tesla". In that blog it was noted that Tesla dropped in price starting at 1:30 p.m. and 42 minutes later it was $5.95 lower in price, approaching the "must-get-out" at 3:00 p.m. mandated option deadline. Put option buyers getting in around 2:00 p.m. did well on their investments. (The stock was down $20.67 on the day). Here was it's chart on that day. It was a Thursday with Friday being Good Friday. Now let's fast forward to today's action, it being the following Friday. Tesla options had a tough start to the day. Here an example of what I am talking about. Look at the 347.50 series of Calls at 12:34 p.m. Are you able to see how they are down in price on the day? Now this. A look at how these same options closed out the day. They charged back upwards towards the close. The $140.00 option price we were looking at below is actually a 4:00 p.m. readout. This chart shows Tesla ...
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Options On Stocks In The Fifteen And Twenty Dollar Price Range With Seven Days To Go And Not Five Days To Go.

I should have called this blog "Ford Calls" or "Harley Davidson Calls" to get more hits but this time I want to show you something a little bit different. What I want to show you is how options with seven days of trading life left in them can suprise. Seven days and not five days. What's the big difference? Well the extra day buys you the action of a Friday bounce without having to worry about your option position expiring that day. Seven and not six days also. These options would need to be bought on a Thursday before the close. This may sound kind of confusing but let me show you two examples of what played itself out last Friday. Let's first use the stock Harley Davidson and use it's Call options as an example. Here is how "seven-day-out-Call-options" would have traded the day later on Friday February 12th.
They jumped 60% in one day! What kind of a jump in the stock's price would have caused that to happen? Well let's look at it's five day chart.
That's not really all that much of a jump. Harley did jump 3.65 percent in one day however it frequently does that. Now a second example. A stock in the $14.00 range. Look a Ford's five day chart.
It also moved up on Friday. Look at how it's six day out options traded on the day. This time I am showing you two series, one series "in-the-money" and on series slightly "out-of-the- money". Both went up however the "out-of-the-money" Calls went up more. Buying in on the Thursday just before the close would have got you into this action.
Both of these stocks have excellent liquidity in their options. That's important in getting decent fills. I could show you a couple of drone stocks in this price range with their options lacking in liquidity. This would make the exercise of doing these kinds of trades more difficult. Keep this blog in your bag of tricks going forward. ** I also note that this kind of an approach is less relevant when playing options on stocks in higher price ranges.

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