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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 Option Trading At A New Level. This Is An Important Read.

Tesla now has option series that expire on a Monday, Wednesday and Friday. A handfull of other stocks shown below have also switched to this same format. Before that they expired only once a week on Friday with traders often wondering if they should jump onboard Thursday seconds before the closing bell looking for a definitive move on the opening. With this new 'three-times-a-week" format traders will be watching the action on Fridays, prior to the markets closing, looking for Monday morning moves. This switchover started back on January 28th of this year. All of the stocks listed below were part of this new change.
Now watch the wild action on one series of Tesla Calls today. First it's five day chart.
Now it's early Monday morning chart. Look at how it has given up it's opening gain. Option traders who bought Call options just before the close last Friday had a morning opportunity to get out at a decent profit.
Now this, a look at one series of its Call options that expire today. Can you see that they traded for over $6.00 a contract earlier in the morning?
Now this about 56 minutes later..
Are these Call options now down and out? Yes they ended up worthless. Let's look at the action after the 3:00 p.m. deadline to get out.
Now let's now look at how one series of Puts did.
What are my thoughts on having options on Tesla now expiring three times each week instead of only once? My first reaction is to say I don't like it. It's going to create a different kind of trader, one who might suddenly only start to trade options on this stock only. If you caught it on the downside today you would have made enough money to take off the rest of the week. Why get a real job, why not just play Tesla options? So here is one thing to consider. One day options, unlike one week or longer term options are stripped of the "time-value" aspect of the equasion. Catch a one, two or three dollar move in the right direction and you will have a quick and comfortable gain. Get in, get out and then do it again. Doing this could become a full time job. Lock yourself in your basement and follow this stock all day. Sound easy? It isn't. I see the potential for one day options trading to becoming an addiction. Imagine the rush from catching corectly the action in two or even three directional moves in one stock in one day. More blogs like this to follow.

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