CAT Puts

So we all woke up Monday morning to yet another selloff. Investors are pissed. Margin calls are going out. If your trying to save for a downpayment for a new house and you have money in the markets it's a double whammy. Is there any relevancy in trying to outguess the markets at this point in time using options as a trading vehicle? Not really. When Russia invaded Ukraine the markets went array for months. We are witnessing the same thing happening now. It's nonsensical to be buying Puts on the closing on a Friday afternoon hoping for Trump to stir up the pot over the weekend yet that's what it seems take to create a winning trade. Everything is screwed up. Market volatility causes option premiums to be priced in a way to disuade traders from entering into postitions. Here is a case in point. Carvana dropped twenty dollars last week. Just below you can see it's chart. Having said all of this the remainer of this blog castes a shadow on everything I have just said. Pleas...

Drug stocks are difficult to play. Look at Pfizer. Here is it's chart. It sometimes finds itself in the top five list of the mostly activity traded stocks. So does Eli Lilly. Pfizer has gone sideways for a month making it impossible to play options on it. So why then am I looking at this? It's Biogen and not Pfizer and Eli Lilly that I want to talk about. Here is Biogen's five day chart. It can swing. What do I know about the stock? Well not very much but that doesn't precude me from playing options on it. I know that it has sold off a whole bunch this year and I am reading that it has some good stuff now happening in it's pipeline. What does this five day chart tell me? It tells me that the direction the stock is going to go next is simply a flip of the coin. I want to now show you the volume in the 140 series of Call options that expire on it tomorrow. Are you able to see that no one is playing them. With a million things happening in the markets then why am ...

If we look at the stock Carvana from a five or ten day persective that's not really enough time to get a full understanding of why the stock is trading the way it is. First a look at it's one month chart. Now a five day chart. On average it's up about five dollars a day. It kind of makes you wonder when you can start to play the downside. Now Netflix, a five day chart. It's the same thing, it's up over $75.00 in five trading sessions. We can't forget Tesla, it's up fifty dollars in five days. Boeing also got sucked into the upward draft as it had a few bits of good news like a government contract for new planes. This stock has also jumped in price. Had any option player tried to fight any of these stocks using Puts as a trading vehicle in the last five days they would have quite simply gotten smashed. Is there any reasons to now think its time to play the next three days of market trading looking for some downside action? Wednesdays are afterall days of...

It helps when the markets rally on a Monday but that's a secondary issue. This blog is about stocks in the seventy dollar price range with options on them staggered in thirty day intervals. Is trading in options which trade in only in thirty day intervals better than options on stocks in the same price range that expire every Friday? My experience is that options on stocks that trade every thirty days tend to attract less interest which in turn means that they are less susceptible to "market-maker" manipulations. Yet this isn't really a point I want to debate. Now this, a look at the seventy series of Calls on "Carmax" at the end of the trading session today. Bid 5:70 ask 5:90. Only two options traded on the day. Let's now look at it's five day chart. So it jumped a touch but nothing to crazy. Now this, I did a blog last Friday, my previous blog where I showed what the same options were trading at on that day. Here is the printout I want to show. ...