It's Friday morning. The stock in question is Boeing after going down in price for the entire previous day. That was the topic of my previous blog. What I am now showing is how the stock Boeing was trading seconds before the opening bell in the premarkets on Friday morning and what the 205 series of Calls "closed-out-at" on the previous day. That number was $1.85 down from a high of $7.50 on that day. The volume traded shown on the the first screen below are stock trades in the Friday morning premarkets, not option trades. Options do not trade in the premarkets however premarket option orders get filled at 9:30 a.m. at the opening price then posted. In the premarkets this morning around 9:00 a.m. it showed Boeing up about $5.00. Had you entered an "at-market-sell" ticket on overnight Call options you might be holding your fill will not give you that five dollar gain. You will get a fill based on the the 9:30 a.m. opening price.
Now this, just three minutes after the markets opened. Boeing was up $1.92 and the 205 series of Calls which expire on the same day were up 33.5%.
Now this thirteen minutes into the opening. The stock and the options are going up.
Let's focus on the moment. After an abismal four days of trading why would any trader be willing to shell out money to chase options expiring in only a matter of hours? One reason is that Boeing might decide to rebound. Let's move onto 9:56 a.m. That's like only fourteen minutes later. Would it be to late to buy in now?
Now let's jump forward to an end of day look at how Boeing traded on the day. One of the things that we can see is that at 3:00 p.m. the 205 Calls were trading at over $5.00 per contract.
Now the 207.50 series of Calls. It also had an exciting experience. "Out-of-the-money" options are much more leveraged as the odds of stock jumping up higher are much lower. Look at the jump in price on these Call options. Look also at the higher volume of trading.
. It can get even crazier. Look at the 210 Call series five minutes into the day's trading action. Only 317 contracts have traded.
Still afraid of playing one day options? Now look at how they were trading eleven minutes into the trading session. The volume of trading has doubled as there is the hint that this could be the real deal.
Look at high these Call options traded up to even though Boeing only crossed the 210.00 mark foe a brief period of time. They traded up to $1.51.
Trading in "out-of-the-money", "last-day-Call-options" only attracts a special breed of traders. Traders that come and go very quickly and do well trading.
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