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A Real Look At Ford On The Opening Yesterday.

The stock opened down and jumped at 9:31 a.m. Look at this chart. In our last blog I followed the trading pattern of it's Calls all day. Had you placed a premarket, "at-market" ticket on the 12 series of Calls your guarented fill on the opening would have reflected the drop in the stocks price in the first few seconds of the opening. Somewhere between 9:30:00 a.m. and 9:30:59 a.m. the 12 series of Calls dropped in price to $.57. Then in the first five minutes of trading they rebounded to a high on the day of $.76. "At-market", "premarket" tickets in this instance would have guaranteed that you would be part of this action. The flip side of this logic is that there were no guarentees that the stock was going to go up. The use of "at-market" tickets on stocks in this price range with four days of trading life left in them should be included in your bag of tricks. Scarier is the use of this type of order on "last-day-to-expiring" opti...
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You Are Smarter Than You Think !

That is when it comes to you being able to figure out what might happen to Exxon options. It's Friday morning. What's going to happen over the weekend to all the oil tankers caught up in the middle east tension? It's scary times. So Exxon opened lower on Friday morning. Isn't that kind of strange? One would think that oil prices could surge over the weekend if the bombings in the Middle East continue. Higher oil prices are now here and that is good news for Exxon, at least in the short term. Here is a chart showing how Exxon's stock opened.
It could be somewhat difficult to understand because it is a five day chart and I am only asking you to hone in on the Friday morning activity. That starts at 9:30 a.m.. Can you see the drop during it's first five minutes of trading? The following one day Friday chart shows this drop better. A sideways line shows you where the stock closed on the previous day.
Now this. Look at how low the 155 series of Exxon Calls traded down to on Thursday the previous day. It's to scare you and point out to you the danger involved.
Let's put ourselves now once again in the moment of 9:05:00 a.m. on Friday. Why might one not be able to pull the trigger and jump in to playing the stock's upside? Well look at how much lower Exxon was trading at on the previous day. One might think the stock is overpriced. It's like you missed the boat yesterday so why even think about looking at it again? It's a honest concern. Now this, good traders are people who are forward thinking. PART TWO. A Look At How Crazy This Exercise Is. Look at it's one day chart again. If you follow it "hour-to-hour" you can see the multiple trading opportunities presented. Exxon options offer tight "bids-and-asks". That's a good thing for making interday trades. Buy in at 9:02.a.m., sell just after 10:00 a.m. to then buy Puts and then sell them out thirty minutes later to then just go long on the Calls for the remainer of the trading time session which ends at 3:00 p.m.for last day option traders. Or avoid that complicated exercise and wait and buy in around noon for a three hour hold knowing at that time there is the feeling that World War 111 coming. I don't usually make such stupid suggestions but these are not normal times. Others looking this situation in a more chilled fashion might simply buy next's week Call options at the start of the day and sell out near the closing or hang on into next week. That approach of course could be dangerous if things somehow simmer down. They could. Here is how the 155 series of Exxon Calls traded on the day and note how low they traded down to on the opening. They traded down to $14.00 dollars a contract! All of this proved itself to be a tremendous trading opportunity.
I hope all of this is food for thought.

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