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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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The Relevancy Of Option Trading In These Uncertain Times. Caterpillar And Exxon

Look at the volume of trading in Caterpillar Calls on a Friday morning on slightly "in-the-money" Calls options twelve minutes into the trading session. These are Call options that expire at 3:00 p.m. today.
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This options are $1.33 "in-the-money" and look at how wildly this stock traded on the previous day. Caterpillar has approximately 465 to 466 million shares outstanding. One would think that there would be thousands of shareholders engaged in "covered Call writing" strategies. Apparently not. The open interest number in these Calls is 27. Why? It's all become to much of crapshoot. That's the reality of our times. The good news is that some traders are still capitalizing on the realities of these crazy times. Case in point are Exxon options. How many more bombs are going to be dropped over the weekend? Look at these Exxon Call options on the opening this morning.
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Getting in on Thursday before the close knowing that Friday mornings would cause this worry was one way to go. All of this upward action happened in the first ten minutes of trading. ** Caterpillar closed down the day $7.77.
Very few traders caught the action in the Puts. Option traders are walking away from trying to trade in these markets.

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