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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.
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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? Look at how Caterpillar jumped on the week on no real news? Up like $83.00 from it's low 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. What else is there to consider? Look at how the stock Disney traded on the week. In a recent previous blog I caught options on this stock for a quick double. Just a one dollar move on this stock's price would do wonders for this series of Calls.
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This kind of chart could do well if the markets have an up day. Conventional wisdom says that few people can successfully trade options for the sake of trading options. I disagree.

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