Posts

Showing posts from April, 2026

Featured

Why The Appeal Of Trading Caterpillar Options Is Now Diminishing

In previous blogs I looked at Caterpillar spiking upwards through the $1,000.00 barrier for the very first time. Twenty and thirty and forty dollar daily jumps on the stock were the norm. Today we are entering more sobering times. Pundits are now commenting on the upcoming release on August 4th of Caterpillar's quarterly earning report. That is not far away. The stock has doubled in price in a relatively short period of time. Is the party over? Look at Caterpillars one year chart. The companies earnings have not doubled in the last year. Far from it. So now what? Buy a Put option thirty days out in the hopes the stock might drop ten percent on a more normalized earning's report? Maybe. Here is an example of the cost of what one of these Puts would look like. Given it's current bid and ask the stock would have to drop to the $1,005.00 just to break even. It could, however most active option day traders are seeking opportunities which can play out in hours or in a day. Case...
Post a Comment
Read more

Options On Stocks In The $4.00 Range "Big Bear a.i."

Image
First a look at the one day chart on a company named Big Bear a.i.. The second chart just above is a five day chart so the jump I am talking about happened on the fourth day of this five day chart which was Tuesday. On Wednesday as you can see the stock slightly retreated. Next you can see how on Tuesday the four series of Calls went from $.04 to $.25. I have blogged about this company in the past. A few months ago this stock was on the most active list week-after-week. Here is it's "year-to-date" chart. This story keeps going. The stock ended having a lessor bounce on Thursday. It was an interesting bounce with a portion of it happened at exactly 2:00 p.m. and lasted for about an hour. Here is what the bounce looked like and this time we are looking at the 3.5 series of Calls which is a lower series of "in-the-money" Calls than we looked at two days ago. Slightly "in-the-money" Calls are the best options to use in situations like this. While al...
Post a Comment
Read more

A Real Look At Ford On The Opening Yesterday.

Image
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...
Post a Comment
Read more

Ford Options At The Start Of The Week. Why Try And trade Them?

Image
Ford one week options. It's kind of random. Throwing money into one week Call options on a stock that was down last week. Here is how the 12 series of Calls are priced going into Monday's opening market. . If the stock has a good day these options could go to $.90. It's not much of a trade however if you're using a discount broker to do your trading it could be a good "in-and-out" situation. It could also be a real drag if the stock starts to tank lower. Now look at this recent five day chart on Ford. I used it in one of my previous blogs. Ford is known to jump on good news. Now this question? Does the simplicity of my thinking scare you? I also follow Nio but I don't like the way it trades. Here it is going into todays opening. Nio like other EV companies are battling it out for market share. I don't trust the narratives of what they are up to. Five day out options (options that expire this Friday) in a way give you a one day free ride, meaning the...
Post a Comment
Read more

The Appetite For Caterpillar Options Going Into An Earning's Report Is Quite Small .

Image
Let's start with this. Caterpillar has an earnings report coming out on April 30th. You should listen to it. It's not going to be difficult to find. Now look at these how these two series of options closed out the week. The Calls are just "in-the-money" and the Puts are just slightly "out-of-the-money".The cost to play the upside with one week options almost equals what it costs to play the downside. That's kind of strange as usually the Calls cost more to purchase than the Puts. Both are super expensive however Caterpillar as of late can jump $15.00 or $20.00 dollars in one day. When I say super expensive what do I mean? 2,690 means $2,690 Americian per contract. That is not chump change. You would have to have a very strong conviction it was going to move one way or another before you would want to jump in. Yet there is bigger problem. The current price of the stock is in a nose bleeding territory. Look at it's one year chart. Is it really doing ...
Post a Comment
Location: 4QX2FV5H+28
Read more

Avis Budget and A Short Squeeze Plus Hertz Getting Dragged Into The Action

Image
Hertz Global is on a terror. . Stocks in the $5.00 range sometimes do that. Yet really it's the Avis Budget short squeeze that is causing this stir. Look at how it jumped just over $105.00 dollars today. How often do you see a chart like this? It's a short squeeze and the stock is trading on high daily volumes. At one point this morning (a Tuesday) there was a "stop trading" on it. Trading options on it defies logic as they are so expensive. Look at this one example. These are the 700 series of Calls and the stock is only trading at 11:17 a.m. at $665.00. In other words they are $35.000 "out-of-the-money". Look at how crazy expensive they are. The stock would have to jump $105.00 or one hundred and five dollars by the end of the week just to break even! Who would be crazy enough to make such a bet? Day traders would be because they are banking on the effects caused by the stocks interday momentum. Let me explain this better by showing you an end of day re...
Post a Comment
Read more

How To Avoid Time Value Traps With Last Week Options.

Image
This blog is not going to be an exhausting study of this topic. I just want to show you a few charts found in recent blogs and comment on which ones seem to skirt the issue of "time-value-concerns' and which ones don't. 1) Avoid Thursday at the close Call options. In this case Thursday is the second last day of the above chart. If you guess the wrong direction on the close it's going to be game over on Friday when the options expire. Thursday at the close on options that expire the next day are the biggest time value traps you can buy into. If the stock moves in the wrong direction it's game over. 2) Ford on a Monday going into Tuesday. On this chart April 13th is a Monday and Tuesday is the 14th. Can you see Ford closing strong on the close of the 13th? It would make sense to get in on the stong closing because these Calls would still have four trading days to recover if Tuesdays opening was not all that spectacular. 3) This time it's Caterpillar and it...
Post a Comment
Read more

Tesla Options Near the Close on Friday Afternoon. Building A Case For Making A High Risk Trade.

Image
Tesla was up 11% in the last five days. Look at it's one and five day charts. ... Now here are one series of it's Call and one series of it's Put options with only 42 minutes of trading life remaining in them. Might these Calls rebound back upwards towards the closing? Afterall the D.J.I.A. is up almost 900 points on the day and this is one of the hottest stocks all week. The 400 series of Call options at this time are "in-the-money" by $.72, and are priced at $1.88. That's a premium of $1.16 over the striking price. Imagine all of the money lost by the existing 400 series of Call option holders in the last 60 minutes! Couldn't the stock now rebound two or three dollars in the blink of an eye? It did afterall once again just drop over $5.00 a share in the last hour of trading and it now seems to be holding steady. That's the carrot now dangling in front of everyones eyes. Is it time for a quick flip? If you have made twenty or thirty option trades on ...
Post a Comment
Read more