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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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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. Short term Puts nearly double everyday.
Now look at Tesla's one and five day trading charts. Tesla was bombarded all week about news of autonomous driving. The narrative was relatively upbeat.
Now at look at this series of Calls. Might Tesla suprise to the upside on the day? They did on the opening and then they dropped.
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.
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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 Tesla Calls with a lower striking price. This time we are looking at the 370 series of Calls which are "slightly-in-the-money".
The answer is no. They went south after that.
Here above is how the markets got weaker on the close. Now for something else to point out. Tesla has tight bid and asks all the way until the closing bell. Look below at the stock Home Depot as an example and look at how far apart their spread is with their soon to be expiring options. If the markets suddenly started to go in the wrong direction imagine the fill you would get if you ever tried to get out.
Credit has to be given to the clearing systems for keeping the bids and asks tight. I like trading Tesla, Walmart and Ford options for this very reason.

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