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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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Two Hour End Of Week Option Trading On Tesla

I didn't catch it but it was there for the taking. Options on Tesla are one of the world's most actively traded options. Tens of thousands of these contracts trade everyday. It's best to trade them using only recently made profits. At 1:20 p.m. Tesla was trading at $366.00 and then forty two minutes later it was trading at $360.05 That's a $5.95 drop. It's one day chart shows us that move however it is barely noticeable. It had larger drops than that earlier in the day. Here is it's five day and one day charts.
Here is a better one day chart.
It's drop starting around 1:20 p.m. is more noticeable with this chart. The Call and Put options expire at 3:00 p.m.. Now this.
This chart shows us the timing that these Puts jumped in price. So here is a question. Who is going to be stupid enough to be playing around with Tesla Puts that expire in less than two hours? The answer is traders clued to their computer screens watching these options go from $1.00 to $1.25 to $1.75 to $2.00 and beyond in a matter of minutes. Knowing that there is a possibilty that this could happen means that a small subsection of short term option traders are on call to reacte to movements like this. The scary part is that automated trading systems can be programmed also to catch this kind of action. I would now like to end this blog with a reference to a blog I did on March 31st entitled "Caterpillar,Telsa And Nivdia Puts On A Thursday Afternoon". It's 3:40 p.m. Tesla was up $16.60 on the day and the DJIA was about to close 1,000 points higher. In the closing minutes of trading I pinpointed it's Puts move up from $190.00 a contract to $365.00 a contract in the last few minutes of trading. Mid to end of the week Puts, on "end-of-day" option trading on Tesla can be at times very profitable.

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