CAT Puts

It's chart this morning. 13.26 % is a large drop on any stock in this price range. Was yesterday's blip upwards warranted? A three dollar share increase in only a matter of three days is somewhat unusual. Options on stocks in the $15.00 - $20.00 range are in general difficult to play especially on stocks like Rivian which burned many of the "early to the party" traders over the last few years. See it's chart. Are we looking now at a good situation? Might the stock rebound a dollar or two? Might the reasons for this mornings drop be negated or outweighed by the positive news of the last few days? Now lets look at two series of it's calls. Notice a low of $.45. Catching a good buy in point all part of the decision making process .Any kind of a rebound would impact the short term Calls more that next weeks out Call options. Next week's Calls would seem to offer better value however traders more in the camp of being "one-day-options" looking for ...

Here is a difficult chart to undestand. It's Nike's five day chart. It appears the world cup tournament has not helped their cause. Do you like this chart for playing the upside? What I like about it is that it seems to have false starts. At the same time I respect the fact that playing short term options in this price range often ends up with disastrous results. Yet saying that, I also know that $.55 option contracts can often double in an hour or two and it's Monday morning which is still all so early in the trading week. ....... Let's see what happens. Now here we are at 11:00 a.m. A safe bet would be to get out and say thank you for a nineteen minute ride. Monday morning resets like this are more common than you might think.* Now this at 1:00 p.m.

It's the same topic I posted last Friday. Today is Independence Day and the markets are closed. For this reason we can't really talk about mimicking last last Friday's trading. Here is it's five day chart. As you can see Tesla dropped on Thursday. Here is a look at how one series of Telsa's Puts traded on Thursday. Now look at the pricing on this one series of "slightly-out-of-the-money" Tesla Calls as of Thursday's close. These Calls would let you be in all of Monday's trading action. Is the price of $4.60 a contract a fair price? Well consider these two points. One day swings in stocks in general in the $400.00 price range can be significant. This five day chart of Tesla below shows you how it jumped $32.13 last Monday! The second point is that long weekends (three full days of no market trading) are know to cause market resets. Stocks like Exxon can get whipped around. That's what makes the pricings on all options now so difficult to gau...

Ford was on a role. On a role that is until their reputation for poor quality control came back to haunt the oce again. In the recent past it was basking in the new news it was entering into a new tranformational era. A new division, "Ford Energy" is going to start making lithium iron phosphate battery cells. Tesla and G.M are already on a similiar path. The stock surged on this news. This week a different reality suddenly set in. Yet another massive recall. This time 770,000 vehicles were recalled with one fix available by August and a second fix not available until April of 2027. Now look at it's three month chart. On this news option traders have jumped into the Puts. Look at the open interest in these two series of December options ... Now it's five day chart. Money was made on playing the downside in a 24 hour period of time after the recall news came out. This news came out June 30th and the biggest drop happened into the next morning's trading session. Y...

In previous blogs I looked at Caterpillar spiking upwards through the $1,000.00 barrier for the very first time. Twenty and thirty and forty dollar daily jumps on the stock were the norm. Today we are entering more sobering times. Pundits are now commenting on the upcoming release on August 4th of Caterpillar's quarterly earning report. That is not far away. The stock has doubled in price in a relatively short period of time. Is the party over? Look at Caterpillars one year chart. The companies earnings have not doubled in the last year. Far from it. So now what? Buy a Put option thirty days out in the hopes the stock might drop ten percent on a more normalized earning's report? Maybe. Here is an example of the cost of what one of these Puts would look like. Given it's current bid and ask the stock would have to drop to the $1,005.00 just to break even. It could, however most active option day traders are seeking opportunities which can play out in hours or in a day. Case...

Why am I often talking about playing Tesla options with one day of trading life remaining in them? Well the Call and Put options on this stock hava a recent history of pleasing it's followers. What are the odds of sizeable jumps happening? I would suggest more often than you would think. Jumps in the first hour of trading can be large. That's a given. Are you able to make money trading these hot potatoes? Yes and no. Fear and greed come into play. Here is how it jumped in price on Friday morning June 26th . First it opened lower. The time to buy in was in the very first minute of trading. It topped out at 11:30 a.m. That was a huge increase in price. Then between 11:30 a.m. and 3:00 p.m. it lost $7.00. Here is a better look at this action. . . Other stocks may also have interesting Friday trading patterns." Last Day Option Trading" is not for everyone. ** Tesla jumped again on Monday.