CAT Puts

First the one day chart. The markets on the day are down. Now it's Puts at 2:25 p.m. Now it's closing price. Now Tuesday morning. In some ways we are wasting our time watching what seems to sideways motion. Is this what successful option trading is all about? It's not like watching Tesla or Caterpillar coming out with earning reports, or watching Boeing jump up in price over the last few weeks. There really isn't any reason to be in this position, other than the indexes are down for the second day in a row. With the clock ticking away at you is this a good time to be risking your capital? Not really. It is a struggle. Now let's look at Walmart at the end of the day on Tuesday. The stock went down in value on the day as did the Puts. Yes the time value is going down which partially to blame but the indexes also had less of a drop than they did on the previous day. These are quiet markets during this holiday period with fewer news reports coming out. Let's...

Ask Ai what a "straddle" is. Here is an example of how one could possibly work. I picked a stock which appears to be going sideways but could have a breakout upwards or downwards. Why think about doing a "stradle" when a stock is going sideways? Well it is sometimes a period of time when the premiums on options, both Calls and Puts settle down with less of a premium for a bias in either direction. Look at these Call and Put options on Walmart. So the question now is how can owing both the Calls and the Puts at the same time on the same stock and with the same striking price make you money? Doesn't that seem kind of odd? The answer is in one of two ways. 1) The first way is to add these nunbers together. Add 68+5+53=$1.26. This number represents the cost of purchasing the Call option, the cost of the Put option and the price it is already "in-the-money". The stock now is trading at $12.05 so purchasing both a Call and Put would pay off only under two...

Remember Polestar and it's recent reverse stock split? It was a 1-for-30 reverse stock split effective December 9th 2025. Now it is rebounding back upwards. But wait, the option makers are making sure use can't use these short term options as a way to play it. Look at this, options on it that expire at the end of this week. No volume, no open interest and a crazy wide bid and ask. What about it's further out Calls? Here is one series further out. Last at $3.30. They are priced reasonably. Four month buys you a lot of time. Now look at these other four EV companies over the last 90 days. Given the volatility in all of these options maybe Polestar's four month out, just slighty "out-of-money" options do have some creditability.

There is a little stock that has recently started to gain an inordinate amount of attention. It trades millions of shares per day and I recently started blogging about it. It's price changes on a daily basis can be dramatic. Here once again are it's details. Now it's thirty day and five day chart. Option players playing one week options on this stock are getting wild rides. Look at this, today's one day chart. Now look at today's Puts. It's one day, six series of Puts on it traded at a low of $.03 cents in the morning and then shot up in the afternoon. $.35 cents was the high. Is there any point in taking this stock seriously and tracking how it's options are trading? Usually I would say not really however when I see millions of shares trading everyday I know that millions of Americans who can trade commission free can glue themselves to their computer screens and play like these these options all day long enjoying these two and three and ten cent price...

Exxon just broke it's previous three month high. Now it's five day chart. The 117 Calls have doubled or tripled in the last two trading sessions. Now it's chart as of 10:42 a.m. this morning. Today is Wednesday. The markets are closing today at 1:00 pm., then closed tomorrow for Christmas and then open again for a full trading day on Friday. Now this. A look first the Calls which are $.30 cents "out-of-the-money" and expire on Friday. Now the Puts which are already like $.30 "in-the-money". Expectations are that the stock is going to go up and that there is still a full day of trading on Friday. Here is what the markets and what the price of oil are doing. Can you see how traders have a preference for the Call options and are hoping Exxon continues it's natural progression upwards. They are prepared to pay somewhat of a premium to be positioned in this situation. I don't know what the outcome is going to be. Nobody does. As a reader can yo...