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Step Down Charts And Short Term Options. Nio

Here is a classic "step-down-chart" with one minute of daytime trading life left in them before the markets close at 4:00 p.m.. The stock is Nio. ... This printout of "in-the-money" Call option also shows one minute of trading life in them before the market closes. It's Tuesday and these Calls expire this coming Friday. You are purchasing three days of market trading life. To purchase one thousand shares of this stock would cost you $5,750.00. To purchase options that control the price movement of one thousad shares of this stock for three trading sessions would cost you $370.00. ( Ten contracts at $.37 each). These Calls are also currently $250.00 "in-the-money" which means if the stock totally goes flat for the next three days your options will still have that amount of intrinsic value left in them. Now think about this. Many option accounts in the U.S. enjoy free option trading and there are discount brokers in Canada who can save you money. A fl...
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Will The Markets Top Out?

The Nasdaq Composite index closed up 4.7% on the week. the S&P 500 index, was up 3.6% and the D.J.I.A.was up 3%. Given the elevated volatility levels options have become extremely expensive to buy. Here for example is how Avis Budget traded on Friday.
At one point in the day the 300 series of Calls traded as high as $15.43 on the day. The stock never traded much ovee the $302.00 range. What an exorbitant premium forming part of this equation.
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Now look at the prices on this week's upcoming Calls and Puts.
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What happened to the old days of paying $5.00 or $6.00 for one week out options on stocks in this price range? Look at how Caterpillar jumped on the week on no real news? Up like $83.00 from it's low of the week back on a Monday.
Here now is what a one week out just slightly "out-of-the-money" 790 series of Puts is trading at.
That's not as bad as the premiums on Avis Budget but look at Caterpillar's thirty day chart.
Actually the stock does look somewhat vulnerable to the downside however the risk of pulling the trigger and purchasing a Put is to great. The stock could keep going up. What else is there to consider? Look at how the stock Disney traded on the week. In a recent previous blog I caught Call options on this stock for a quick double. Just a one dollar move on this stock's price this week would do wonders for this series of Calls.
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Conventional wisdom says that few people can successfully trade options for the sake of trading options. I disagree. ** Disney the next day on Monday.

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