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Drone Stocks On A Really Bad Day

I did the math. The average one day drop on Friday on these five drone stocks was 13.93%. The D.J.I.A index on that same day was down almost 600 points. I don't play options on any of the stocks in this sector of the market. $Unusual Machines the most expensive of the six dropped down the most at 18.36% It now trades at $26.37. It has weekly options on it. Here are it's thirty and five day charts. What a nice run upwards it had last month. ... Now this. A look at how one series of it's Call options closed out the day. I see something I don't like. It's the small open interest numbers. That to me means poor liquidity whenever it comes time to execute a trade. That plus after such a big recent run upwards you would expect to see higher volumes of option trades. I have often talked about how I like trading $Walmart options because the bids and asks are so tight with instant fills. What about the other mentioned drone stocks on this list? Are they more playable? Let...
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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.
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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 flip on the opening upwards and these $.37 Calls could jump to $.45 in a heartbeat. $370.00 could go to $450.00. What a waste of your time you might say? Maybe, however consider this. Here is the one day action in "Nio' only six trading sessions ago.
When it decides to move it moves quickly. Here another five day chart lifted from a May 4th blog posting . It also shows the type of movement this stock can make. It can trade wildly and often does.
My point is that some option players micro manage positions like this to the point where it all becomes a bit of a game. Let's see what happens to these options this time. it should also be mentioned that quarterly earnings come out on Thursday. Sales are expected to be up however a quarterly loss is expected after reporting a previous quarterly report. What do you think of it's step down charts at a time like this? Let's find out.
Wednesday is a new day. The DJIA was up strongly.
Nio was down!
These Calls still have two days of trading life in them. More traders are looking at them. To be continued. The long awaited quarterly earnings report.
The new price of the 5.5 series of Calls was $.64 on the opening. It would have taken an "at-market" ticket on the opening to sell to pocket that price. Selling "at market" can sometimes be your best friend. That in itself is another topic.
This seris of Calls closed at $.26 on the previous day. Sales were good but they took a hit (had a loss) on earnings. Yet at the same are offering guidance of 110,000 - 115,000 units of production for the next quarter, up 53-60% from a year ago. "Step-down" charts are difficult to trade and as you can see timing is everything. *** How are these Nio Calls going to trade tomorrow morning?
Anything can happen!

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