I realize that this type of a blog has a limited appeal. Many readers would dismiss this blog as being crazy. I get that. A blog in part about watching option pricings on one particular series of Puts, the 215 series of Puts on Boeing move on a minute-to-minute basis on a Friday just before they expire. Here we are looking at Boeing Puts at 9:56 a.m.
The stock has just gone up and the series of Puts shown above have gotten crushed. Now a look at it's five day chart. This is where it will get interesting.
Notice the stock has already had a rebound off a sharp morning dip. Traders who used the 212.50 series of Calls on Boeing's soft opening were already well rewarded. Only 121 contracts have traded during this period of time.
Here is what the indexes are doing.
So that's it. You could wager $100.00 U.S. plus commisions for one Put contract (the 215 seriess of Puts that expire in the afternoon), or multiples thereof and walk away for the next three or four hours or so in the hopes that the stock will have a bad day. In part it's really just a bet on your abilities to recognize chart formations. I never checked to see if there was any news on Boeing. Now this question. If you bought in and a small gain quickly materialized would you take it? Sorry. It's now 10:46 a.m. There is no gain. That opportunity never presented itself. In fact these $1.00 Puts we were once excited about dropped down at one point in time to $.42. That was the time to be buying in.
..
If you decided to buy into this action can you now see the mess that you would now be in? Here we are seven minutes later and things for these Puts are starting to look a tad better. That's how quickly things can change.
Can you see at this point in time how dangerous these Put options are? Is all of this a reckless game that some traders with money can afford to play? Is this the agony one has to endure before one starts to see some form of a light at the end of the tunnel? Hold those thoughts. Now look at this. It's now 11:00 a.m.
Now this 11:18 a.m. readout. These Puts have come back to life! This happened in an 18 minute time period. If you examine it's chart below you can kind of see how this could happen.
The Puts made it up to $1.43.
At this point in time do you take your money and run? I would. Are you able to see a degree of luck involved in catching the right timing?
Things can go flat on Friday afternoons. At 11:30 a.m. and we are now back to where we first started.
This wasn't a fun ride. Now a look at these same Puts just prior to the 3:00 p.m. option expire deadline on Friday.
..
The stock was held flat for most of the afternoon which often happens as so to keep these options locked down to their current pricings. Getting out of the Puts in the late morning turned out to the only way to successfully walk away with a profit. So what are the lesson here? Well one lesson is that late Friday morning option trading can sometimes be a sweet spot in "one-day" option trading.
Comments