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A "Love-Hate" Relationship With Pfizer Options

Pfizer options often disappoint however there are times when they can be your best friend. Let me try and explain. First look at it's five day chart. The 24.50 series of Calls have more than doubled in price in two days. Volatile stocks like this in this price range attract an inordinate amount of attention when it comes to option trading and it only flares up during these brief periods when the stock has these extreme price moves. Look at the open interest in this one series of Calls below. It's quite substantial. Now for a simple calculation. If the stock moves up today to $25.00 these $.37 cent options on the 24.50 series of options will probably move up to the $.55 cent range. Buy and sell let's say a block of 25 contracts and you will be rewarded with a nice gain. Now let we share this one observation. Here is a look at how the D.J.I.A. traded yesterday. It was down. Who wants to be holding short term Call options overnight if the markets are souring? Wouldn't t...
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Options On "Ford" Might Surprise You.

Ford is the stock chosen to explain this situation. Here is it's morning chart.It jumped on the opening with the markets opening up strong and then gave back most of it's gains.
So what does it's five day stock look like?
So now let's look at two different series of it's Call options that expire this Friday.
Here is how these two series of Calls closed the day.
Now Tuesday morning.
Notice the low volume of trading. Trading options on stocks in this price range is more difficult to do than trading options on stocks in higher price ranges. You can't anticipate the daily swings quite the same way. In situations like this take your profits and run. * Here is how Ford closed the week.
The 11.50 series of Calls closed at $.02.

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