CAT Puts

Let's look at it's five day chart of Costco. I talked about how Costco spiked on an earning's report last Friday. Why would a food distribution stock do so well in such uncertain times? This five day chart is as of 3:30 p.m. on Wednesday. It's kind of going sideways on the day. Sideway moving stocks take the air out of short-term option pricings. Here are the 1040 Puts which are fifteen dollars "out-of-the-money". Why bet on a stock dropping that much in two trading sessions? One reason is that a drop of half of that amount will move the needle on these $3.29 Puts.  Options on stocks that trade in the $1,000 can take some strange twists and turns. But why Puts and not Calls?  The main reason is that Costco jumped last week on an earnings report which was not necessarily all that impressive.  Is Costco about to now take it on the chin?  Sometimes it takes a week or two for stocks to come off their "earning-report-highs". Then there is the new issue of...

 There is a danger in playing one dollar stocks. That plus they can be boring to watch. Many look interesting but owning them is a gamble. Here is Polestar.  Here is it's ten year chart. It's Swedish owned. Like many startup electric vehicle companies it's debt structuring is complicated and their focus on keeping their shareholders happy is low on their priority list of things to do. That's understandable. They also make some of their vehicles in the U.S. so the tariff issue is not going to be an issue. Their vehicles look kind of boring but that's because they are Swedish inspired. Money was waisted a few years ago on "super bowl" advertising. Here is how they are  currently doing. Things look better but not enough to reverse the negative sentiment hanging over it's share price. The path forward to positive earnings is uncertain as all electric vehicle manufacturing companies are facing challenges. In China some analyst say that it's a race to th...

 When it comes to option trading Costco options have a couple of things going for it. First, the reliability of it's business model. It's the retailing of the stuff people like to buy. Secondly they have a massive distribution system and it's unlikely that any new competitors will come out of the woodwork and disrupt what they have going. When you buy options on Costco you kind of know your positions you purchase are not going to blow up and obliterate you for reasons you never expected. Also on the plus side for option traders is that the stock moves up or down quickly. On the other hand it's always  difficult to rationalize the exercise of throwing money into playing the downside ( buying Puts) when we know there will be traffic jams in Costco's parking lot this Saturday like any other Saturday. Costco is not going to go away. Here is Costco's five and thirty day charts. First the five day. The five day chart shows it jumping in price on last weeks earning rep...

 For lack of better words it look perky. The stock has had a nice run as of late with good news on a number of operating fronts. In the past I have written about buying calls on Boeing for morning pops on Monday mornings. He is it's five day chart. Now here is how this weeks series of $207.50 Calls for this week closed on Friday. This series of Calls is very close in price to where the stock closed at on Friday. It will be the series of Calls which will benefit the most if the stock decides to move up in price. They closed at $2.95 per contract. That means one contract will cost you $295.00 U.S. plus a $10.00 commission give or take a dollar or two depending on who you trade with. Last week Boeing was up $4.96.   In the pre-markets this morning the stock is up nicely  trading at bid $210.39 ask $210.50 Now at 9:35 .a.m. readout, which is five minute into the opening markets.  The same 207.50 Call options are now trading at $5.10. So last week Boeing was up $4.96...

This was a special situation. A quarterly earning report coming out on the eve of one day options. With five days in every trading week the odds of that situation happening are only like twenty percent.  Some companies, more in tune with the potential for market manipulations will avoid earning report releases on Thursday afternoons for this very  reason. For some option players the event of  having one day options reacting to quarterly earning reports is like waiting for Christmas morning. Especially on stocks in the $1,000 dollar range. First the Puts on a Thursday morning at 9:52 a.m.. These are Puts which are $9.75 "out-of-the-money" with one day of trading life to go before they expire. Look at how crazy expensive they are. The stock would have to drop $21.00 in Thursday and Fridays trading just to break even. Earning reports will be coming out at 5:00 p.m. (on a Thursday - today) which is after the market closes. The fireworks will start in the next morning when the...

 It might start making money again. Here is it's five day cart. On Monday May 22th  the markets jumped up over 800 points and Boeing was down. Monday was May 27th.  Here is Thursdays chart. If you look at the chart you can see some traders got in on the opening on Call options near the previous day's closing price. Then these Calls jumped up explosively on the day. Why it happened. Well their CEO made a speech. He stated that the company is making a come back. Why the stock didn't open a few dollars higher the following morning rather that having a limp opening is something I don't know. Is it to late to play it for a continued rebound tomorrow, a Friday? Here is how the $202.50 Calls closed the day which is a Thursday. The "open interest" number is fairly high. Now the $207.50 Calls which are just a touch "out-of-the-money" Calls. It was good news that caused this stock to go up. If the market opens stronger these "one-day-out" options cou...