CAT Puts

Let's start with this on a Monday opening. Now it's thirty day chart. The DJIA was up over 700 points on Friday and Netflix didn't share in that rally on that day. This morning it jumped up at the same time the DJIA was down slightly an hour into the trading session. Now the price of these Puts which expire this Friday. Today is a Monday and it's 11:25 a.m. and Netflix is way up. They are affordable given they match the price that the stock is currently trading at. I wouldn't play Netflix options towards the end of the week (like Wednesday to Friday) because you will get smoked if you pick the wrong direction, however on Monday after a pop in a slightly down market it is a call to action. Netfix was playing catch up to the rest of the markets on the opening and suddenly it was evident the stock was moving in the wrong direction. Now shown below is it's closing price with the stock down over nine dollars from where it's price was back at 11:25 a.m.. Now ...

What do you think the stock is going to do this week? Here is what it did last friday. Now here is what it did in the last 30 days. If you think it might go down on the week here is last Friday's closing price on one series of Puts which are just over five dollars "out-of-the-money". Can you see they cost $2.96 per contract and only 119 of them are outstanding? Option traders on last Friday's close were not rushing into buy them. But wait, why not buy the Puts closer to the stocks current selling price? Why not buy the 435 series of Puts? Well they cost more. The 435 Puts last Friday closed at $4.93. The 435 Puts would be more sensitive to any minor dip on the opening however Caterpillar could still easily gain another five dollars on the day. That's why the interest in these Puts is so low. Here is what Wall Street thinks. So what do I think? I know this stock reserves respect and it's hard to fight any stock in such a strong uptrend. Here however on a M...

I don't usually talk about sickly feelings as it pertains to "option trading". The 332.50 series of Tesla Calls on Thursday August 21st that were to expire the next day closed at $2.87 per contract with the stock closing at $320.11. What that means is at that time they were "out-of-the-money" by $2.39 and would end up worthless in value the next day unless Tesla jumped back upwards again. Upwards and over the 322.50 price.The 332.50 price plus another $2.39 just to break before even figuring out the commission costs. I also gave the example in a recent blog of how back at Wednesday on the close these same series of Call options were trading at $5.75 a contract after reaching an interday high of $11.30. Look at its five day trading chart to see what caused these drastic price changes. With the bounce on Friday a $2.87 contract went as high as $17.45 from a low of $2.25 on the opening. That means a Telsa Call option priced at $225.00 on Friday morning increased ...

First Tesla. Caterpillar. Look at how the markets closed today, a Friday. The D.J.I.A. was up 867 points. Thanks Mr. Powell. By Monday there will be a new interpretation of everything Powell said. Look at how few Put contracts there are on these two stocks. Is there any logic to the markets? Yes. Look at how both Walmart and Costco sold off today on such a strong day. Everything Trump is doing is still a worry, especially to shareholders in these two companies. Let's watch these two series of Puts on Monday. What an ending to the week!

Here is Thursday's trading on the day on Caterpillar. Here is how the $417.50 calls that expire tomorrow closed the day. Something happened this week. Caterpillar had a quarterly earning report come out on Tuesday. It's stock trading action survived this news unscathed. Here is it's five day chart as of the end of Thursday. Maybe the 420.00 or the 422.50 series Calls are better to look at? Here they are. But wait. Deere got clobbered today on the release of a quarterly earning's report. Why didn't Caterpillar sell off in price in sympathy? It shoud have. Deere sold off $34.70. For this reason alone I would be more inclined to purchase the Puts. Here is the series I would consider. To be continued. Now Caterpillar in the pre markets on Friday morning. One option would be to sell in the premarkets and walk away. The second option would be to see how it trades on the day. Here is the answer. Caterpillar was down $9.71 on the day! It's the kinship with Deere...