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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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Caterpillar Puts On A Thursday Morning With Friday Being A Holiday

First it's five day chart going into the opening.
Now it's one day chart showing a modest selling pressure towards the close of the day.
Is this dip towards the closing a precursor to Caterpillar opening lower? It's difficult say. Here is how two series of it's Puts closed the day.
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Notice the low volumes of Puts and think back to how Caterpillar was trading over $50.00 lower only two days ago. To me these Put options don't truly reflect the volatility of this situation. Now here is how these two series of Puts traded on the following opening.
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I don't understand why more traders didn't see this coming. *** Here is a more detailed look at how Caterpillar traded on the entire day.
The low of the day was at exactly 9:45 a.m. or fifteen minutes after the market opened. It's kind of a suspicious number. Read my April 5th blog which investigates this thought further.

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