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Micron Technology. A Nervous Market With Big "One-Day" Option Swings

It's Friday July 31st. Look at this stocks one and five day charts and then look at how one series on Puts which expire today struck gold. First it's one and five day chart. ... I don't know much about this stock however this blog follows the last blog on the topic of buying Puts on spiking stocks. Look at how this one series of Puts below has reacted on this one day selloff. Had I picked a series of Puts further "out-of-the-money" the gains would be even more remarkable. Look at the low of the day which happened on the morning spike and look at where the option is at now! Yet wait the game is not as easy as it looks. How often does a stock drop that much in one day? Not very often. Look at how Apple dropped like 30 points after an earning's release and this series of "out-of-the-money" Puts merely doubled. It could be argued that risk involved in making the trade outweighed any potential reward. If we now go back to our friend, the stock name...
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Last Day Options - Tesla

If your new to option trading you wil not have the courage to play "last-day-until-expiring options". I get that. Perhaps a mid week option trade would be better. Find a chart pattern that looks interesting and buy yourself a three day ride. Or safer yet, buy an option on Friday at the close with five days of trading life left in them. Correctly picking the right directional movement over such a time period would instill a feeling of confidence in what you are doing. If you fail in such an adventure what would I advise you to do? Give up? No. Study harder. Now let me throw this one at you. Here is a recap of a blog I posted yesterday where an option trade doubled in price in just less than ten minutes.
In all fairness most newbie option traders would not be purchasing "out-of-the-money"Call options which expire in only a few hours. What I am about to say may sound a tad stupid. If you want to jump into the world option option trading Tesla is one of the top stocks in the world to play options on. Why? Well no one on the entire planet can really understand how Tesla's dynamics change on a day to day basis. It's a "pack mentality" when directional moves either upwards or downwards start to kick in. In only forty or sixty minutes the price of the stock can move up or down significantly. With using "one-day-options" as a trading vehicle the needle on their pricings can move materially over such relatively short periods of time. Case in point is what happened on Friday. Look at this chart. It shows how Tesla traded on that day.
Shortly after the opening it moved into negative territory and then it smartly rebounded. The rebound lasted over three or four hours. What a ride Call option traders enjoyed. Look at the high volume of options traded on this one particular series of Calls. Other series of Calls experienced similiar gains.
Newbie traders are welcome to participate in this trading without really understanding the mechanics of why this is all happening. There are however no guarantees that the end result will turn out like this. *Also read my April 10th blog titled the "End Of The Day" Friday Option Trading on Tesla".

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