CAT Puts

G.M. popped yesterday on an earnings report. That puts us in "a now what" trap. Will it go up or down and what about the Calls and Puts on it that expire this week (today is Wednesday) and next week? Look at at this weeks Calls and Puts that expire in three days. ............. As one would expect there are more outstanding Calls than Puts. Now a question. Would you be nervous that G.M. might sell off on the opening? Investors now have had time to digest this news and fret over what might happen to the car industry in America going forward. B.Y.D. is now sending boat loads of vehicles to new ports all over the world. That can't be a good omen. So to catch any action on G.M. the very best time to catch any waivering is in first ten minutes of today's trading. Here is how one series of puts traded on the opening. In my mind this was the easiest trade on the week. It was a case of striking when the iron was hot. Now this. Sometimes irons are slow in cooling off.

Here is the news. G.M. is the same story. Re : Onshoring vehicles. This onshoring move is only going to cost them money in the short term. On a different note, what happened with Boeing this morning was somewhat to be expected. A good earnings report that was more or less anticipated. Now back to G.M.. G.M. has a way of pulling lots of levers to paint a picture of what is happening. Many option players stay away trading options on the week before these reports come out. Catching Tesla Calls on a Wednesday afternoon when the DJIA jumps 300 points in two hours is a simpler way of speculating in option trading and surviving.

Here is it's chart. Can you see how much it dropped? Here is what one series of Calls and Puts did. First the Calls. Notice the light trading. Now the Puts. The Puts on the opening never traded at lower prices than this one lonely trade. The Bids and Asks would have dropped after this trade happened however there were no takers, partly because there was a built in expectation that the stock might rebound upwards again. Now let's push forward. Here is what it's five day chart looked like at the close of the day. Step down formations on charts are not a good sign. That brings us back again looking at the 1,062.50 Puts. Here is how they closed. The reality of stocks priced in the $1,000.00 dollar range is that they can go up or down $25.00 in one day. Costco and Eli Lilly often do. This is why these option premiums are so expensive. It will be interesting to see what happens next and I note so few option traders find value in trading them. Now this. We are not going to ...

Look at this chart. It's Exxon's one day trading chart of last Friday. Zoom,zoom, zoom. Here is it's five day chart. Shipping oil on the high seas is becoming more of a game of cat and mouse. Some ships regularly change their flags and their colors. Looking at the above five day chart on Exxon Mobile would you want to be holding this weeks 135 Calls starting the trading session on Monday morning? Here is how the 135 Calls closed the week. Now this, the premarkets on Monday morning. You can't trust these numbers. Sometimes the hype burns itself out before the markets open. At some point in this process the following news was being assimilated. Now this. Exxon jumps on the opening but not that much and quickly gives up some of that gain. Now this. The Calls are up 25% in the first three minutes of trading. That's something but not all that bad if you bought into this series of Call options during the closing seconds of Friday's trading session. Are t...

When you see Caterpillar drop over $21.00 dollars in one day with an earning report soon to be coming out what does that tell you? One could speculate that some institutional traders who own 71-72% of the outstanding shares are selling their shares and saying thank you for a good ride. Get out before it's earnings come out. It's a double in price in less than one year event. It could be said that the reason it has gone up so much is because everyone is waiting for the war in Europe to come to an end. The equipment that Caterpillar produces will be needed in the ensuing rebuilding process. This is forward thinking which has little to do with this years earnings. Now this printout. Friday's volume of trading in this one series of Call options was 100 contracts. That's a suspicious number. It could be one institutional trader trying their luck on selling short fifty contracts on this one series of Calls to then close them out later in the day. That would be a straight f...