CAT Puts

You have to be quick on the opening. It's a Tuesday. Look at this five day chart which has a spike up formation. The last day on the above five day chart is today's trading action. Here now is it's one day trading chart as of the close on Tuesday. You had to buy in early, really early on the opening dip. So the stock closed Monday at $346.09 and on Tuesday sixty seconds into the mornings trading action (which was 9:31:00 a.m.) it was $344.31. Then at 9:32:00 one minute later it was at $343.80. That's an opening drop of $2.29. Now look at this one series of Call options. A low of $375.00 at 9:33 a.m. and a high of $750.00 at 9:56:00 a.m. This is a case of playing a "step-up" chart formation in the first hour of trading. After that the upward thrust ran out of steam. It helped that the D.J.I.A was up 537 points on the day. Buying in on early morning dips on a stock with a"step-up" chart formation sometimes is a profitable experience.

"After it happens written blogs" are not as interesting as "live-action follow this now" blogs. I realize that. Look at Lowe's trading at 9:34:59 on Friday morning. During that second 932 shares traded. The stock was at $202.21. Then at 9:35:00 a.m., in that second 24,370 shares traded. It's new price was $202.85. That's a $.64 cent increase in only one second. Why would that happen? Could it be A1 trading at exactly the 9:35:00 minute mark? I have talked about this before. Look at it's one day chart. Now look at how this one series of Calls, the 202.50 Calls that would be expiring that day traded. Imagine catching them at 9:35 a.m. when they traded down to $.20. Notice how few of these Call options traded.

I wrote the very same type of blog about Boeing's trading pattern last Friday. In that blog Boeing went flat in price for the entire afternoon. Any profits to be made in the Puts happened in a very limited period of the morning's trading action. Might things today happen in the same way? The price of oil is suddenly up. That's not good for Boeing. Let's begin with Boeing's five day chart. Now it's one day chart on Thursday. Look at how the stock wandered back up towards the very end of yesterday. Could it inch up another touch on the opening and then run out of steam? Would this be a good time to be focusing on the 210 Puts? Experience has taught me not to be jumping into Calls options on Thursday afternoons to catch Friday morning rally. That's more something one might do at the end of the day (on Fridays) to catch a Monday morning bounce. Here is a look at what two series of it's Puts are doing and it's chart about eight minutes into Friday morn...

Pfizer options often disappoint however there are times when they can be your best friend. Let me try and explain. First look at it's five day chart. The 24.50 series of Calls have more than doubled in price in two days. Volatile stocks like this in this price range attract an inordinate amount of attention when it comes to option trading and it only flares up during these brief periods when the stock has these extreme price moves. Look at the open interest in this one series of Calls below. It's quite substantial. Now for a simple calculation. If the stock moves up today to $25.00 these $.37 cent options on the 24.50 series of options will probably move up to the $.55 cent range. Buy and sell let's say a block of 25 contracts and you will be rewarded with a nice gain. Now let we share this one observation. Here is a look at how the D.J.I.A. traded yesterday. It was down. Who wants to be holding short term Call options overnight if the markets are souring? Wouldn't t...

I.B.M. had a bad week. Here is how bad it was. Sometimes you see charts like this. It was down $74.89 on the week. What happened? The headlines said "I.B.M. just sent a warning to dividend investors". Something about it missing earnings forecasts because of an artificial-intelligence-related shift in it's customers spending. That is a new one that we don't hear very often. Which way is this stock going to now move? It's probably dumb to be chasing this when the outcome will most likely be all so random. Just walk away and let I.B.M. figure out it's own problems. It may take time. Here is what the Calls nearest to what the stock is trading at are doing going into Monday morning's action. These are options that expire this Friday. Don't gasp and say that the premiums exorbitant? There are still expectations that the stock could rebound after such a big price decline. Buying into a Call option position at this time after a big drop in price places you i...

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 t...