CAT Puts

There was news. McDonald's is winning at drawing it's customers back in. Quarterly earning were released this week. The stock jumped on Thursday on this news. See this chart. Now it's Puts trading on Friday, the day after. Logic has suddenly set in. With gas prices so high who can afford the gas necessary to drive to a McDonalds? A low of $.10 to a high over $5.04. (See the small Friday morning opening bounce upwards which would have driven the Puts at that time down to the $.10 price range). What a trap. You should you be thinking about opportunities like this. Sometimes they happen out of the blue. ** Ask Chatgpt why Mcdonald's stock dropped so much on Friday.

Look at it's chart. Now how one series of it's Call options closed the previous day. Now it's ten minute action. The $2.81 price is now $7.70. How do you now feel about looking at the downside? Look at these details. .... Reversals are more likely to happen in the afternoons, not the mornings. I like midweek option trading on stocks in the $225.00 price range. Now here we are at 12:59 .p.m. Nothing has really changed. That kind of makes sense because it is exactly at the point of middle of the week trading. To be continued. Now a 2:37 p.m. update. The NASDAQ is super strong. Getting stuck in this position wasn't the name of the game. The markets were strong on the news of peace with the price of oil coming down. The real winners where the people who got in on the close yesterday who benefited from this morning's bounce. So many of the daily moves now happening are politically induced. This isn't the brightest of positions to now be stuck in. Now Thurs...

It's Tuesday at noon. Here are the Nio "six-dollar" series of Calls that expire this Friday . Now it's five day chart. Now a more detailed one day chart. Now Wednesday's closing numbers. This is not a good position to be stuck in. Can you see how in two days these calls lost half their value? To be continued. Now Thursday on the close. Can you see how exhausting it is to watch options in this price range. Now this. A jump of sorts on Friday morning. The six series of Calls on Nio closed the day at $.04. Can you see how they jumped on the opning to a high of $.07. It gets even crazier than this. Look at how the Puts got squeezed on the opening down to $.05 to then only rebound back up to a high of $.19. Can you really be buying $.04 options, or $4.00 per contract options on a Friday at the close expecting to make money? That is the question you have to ask yourself.

I have ignored this stock all year, not knowing much about it. The stock is Sandisk and it doesn't pay a dividend. Sometimes I think that the stock has gone up to much in price to quickly. Is trying to play it for the downside with one week Put options the way to go? Why try and play Puts on a stock that never seems to go down? Why not just ride the Calls up? The stock is up $52.00 on the day. At noon on a Monday here is what one series of it's "just-in-the-money" Puts look like. Do these premiums seem to be abnormally high? Yes. $59.00 dollars means $5,900.00 dollars per contract. If you are new to option trading stay away from these ones. Other stocks trading in this price range like Costco have options on them trading at much lower prices. Here is an example of what I am talking about. If we look back at a blog I did last week on Caterpillar you will see how much of the time premuim built into the pricing on these "one-week-to-expiring-options" decreas...

First it's chart. Then a look at one series of it's Call options at 9:48 a.m. Look at how they traded down to $.72 cents. Now this five minutes later. Now this another five minutes later. Would this be enough of a gain to take making it your first trade of the week? Here is how they closed on the day with the DJIA down 557 points on the day.