Featured

CarMax Puts?

 Here is the number. Call in to listen to their just released quarterly report. You won't have to talk to anyone. It is 800-839-1247. In about five days this link will disappear. Please listen to it. I listened to all of it once and to the first half of it two times. What I learned is that their retail car sales on the quarter compared to the same quarter a year were up 6%. They purchased 336.000 vehicles from the public, up 7% and 48.000 from dealers up 38%. Their average retail sale price was $26,100, down $400.00 per vehicle from last year. They doubled their share buy back program. AI technologies are now helping them operate more efficiently. Everything seems positive. But wait, we are talking about  the used car business and what could happen if consumer confidence suddenly starts to wain? Look at it's three year chart. It now sees to be hitting a rough patch.  Now a one month chart.  All of this talk about tariffs and what level of tariffs will be imposed on n...
Post a Comment

An Introduction

Online trading accounts. Some people call them a gift from the Gods! Instant access to a world of near endless trading opportunities. Seamless executions with one click of a mouse.

It's 2:30 p.m. on a Wednesday afternoon and the stock “Caterpillar” is down $2.15 on the day and up 30 cents in the last ten minutes. The DJI was down nearly 200 points around 11:30 a.m. and has now rallied back to being down only 40 points. Many stocks seem to be rebounding from their lows of the day. Would this be a good time to purchase a slightly "out of the money" Call option on "Caterpillar" which expires on Friday with the hopes that this upward directional movement will continue over the next twenty or thirty minute time period? That’s the length of time it might take for a Call option priced at $185.00 to jump up to $250.00 or beyond. After you deduct the costs of commissions you are ahead of the game. Do that a couple of times a day. Not bad for observing a short term price swing.

You do not have to be a “Rhodes Island Scholar” to be part of this trading action.. You are not going to lose your house to the bank if your early days trading create losses of $250.00, $450.00 or $650.00. It is more about using the knowledge gained from previous trades to evaluate the risks involved in doing your next trade. It is learning how to protect yourself from taking unnecessary risks like holding onto random options positions over the weekend when who knows what might happen. It's also about learning how to read to your intuitions.

My name is Peter and many moons ago I did a short gig as a “Merrill Lynch” stockbroker. I now work in an unrelated profession, but I still have a passion for day trading Call options (betting on stocks to go up) and Put options (betting on stocks to go down). Well hold on, betting is not the proper word. Nor or are the words speculating, hoping or praying. Perhaps a better word is anticipating. Anticipating individual stocks to make short term upward or downward directional moves. 

This site is designed to show people the types of trades I make and why I do them.  I like Fridays for trading "one-day"  options that are soon to be expiring. You can  get the most bang for your buck on that day if you correctly anticipate which way an individual stock is going to move. One of my favourite stocks to trade options on is “Caterpillar” because daily swings of two or three dollars on it are the norm. It is also a  stock very much void of most market chatter.
It is however largely owned by institutions who sometimes have a herd instinct when it comes to trading. 
There are times when I will take a week off from watching the market, knowing that I will be not be handicapped when I return to the action.  Option trading always offers a world of trading opportunities. Without any further introductions let me share with you some of my most recent trading experiences. 

I offer no promise of instant successes and I do not encourage you to do what I do. I just think that people in general will benefit from being exposed to platforms like this. Cheers.


Comments

Post a Comment

Popular posts from this blog

Living on Kraft Dinner?

Image
What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
Read more

The Little Engine That Could

Image
Walmart again. It's all I seem to blog about. Here is it's five day chart. The stock keeps going up and the option series are set up in one dollar spreads. Even a fifty cent move on the stock moves the needle on these Calls. Look at how this series of Calls was trading yesterday at 3:00 p.m.. Now here is this same series of Calls just before noon today. Thirty days of upward action like this punctuated by the off day of decline. Now notice the higher volume of trading in the series of Calls with the higher striking price. These are the ones's with more leverage. At the same time look at the five day chart on Costco. The two stocks sometimes trade in tandem. Humpty dumpty sat on a wall .... a had a great fall. Someday soon a fall might happen but what a great ride it has been.
Read more

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slighty out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-mas...
Read more