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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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It's Almost Spring - Home Depot

On Monday I talked about two things. First I talked about catching Tesla dropping in price as the markets sold off after a super strong initial surge upwards. Then I talked about Calls on a stock called Super Micro Computer and how it's seventy one year old co-founder got arrested causing the stock to drop over 30% in one day and playing it using Calls for a slight rebound. Both of those situations were one day, relatively straight forward trades. This blog today on Tuesday leading into Wednesday is different. Home Depot jumped upwards in price on Monday partly on "self-promotional" news and then dropped a touch. Here we now are looking a Home Depot at 1:30 p.m. on Tuesday. As you can see it has rebounded somewhat. The DJIA is trading relatively flat.
....
It's a good news story but might it be running out of steam? Once again, at 1:30 p.m. according to the volume of Puts bought it looks like it is not going to. Traders do not appear to be jumping into the downside. Here is a look at it's 330 series of Puts.
I am not a big fan of playing options on stocks like Home Depot, Lowes others in this retail space. I find they can run up or down on misinformation. In any event, I think the sentiment on this stock can turn negative very quickly. Higher energy prices will place a drag on margins. Costco is feeling the same pain, trading down from it's recent $1,000.00 dollar prie range. I have recently talked about that. Here is a statement made yesterday by a company exective which feels somewhat shallow.
Let's watch this 330 series of Puts which expire this coming Friday. Now this fifteen minutes later. The stock is holding tough.
Now this. An end of the day reading.
Here is how the markets closed the day.
At this point anything can happen. In a way it watching is situation unfold is a mistake I should have avoided. Holding overnight option positions on Tuesday evenings on a stock that spent most of it's afternoon trading life going sideways is not a good thing to do. Home Depot is not in a freefall mode. With three full days of trading life in these options anything can still happen. Yet honestly there is no real reason to be in these Puts. Let's see what happens. Now this in the premarkets.
These readings often end up being wrong. Now a 10:40 a.m. readout.
Now this at 10:58.
Take back your money and get out. Two points to be learned. 1) Tuesday afternoon options that expire on Friday are usually "ambiguous" trades. 2) Premarket numbers can lie. ** Now a Thursday at the close look at the 330 Puts.
The gentle decline in the in the stock's price on Thursday was not reflected in the pricings of it's 330 Puts that expire on Friday. The time value pricing part of the equastion is quickly decreasing Let's see what happens. Will the markets continue to down on Friday? Yes!
I don't know why so few traders saw this coming. The DJIA was down 793 points on the day.

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