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What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
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"Ford" Down One Dollar On The Opening.

That's a huge number and it happened in the first thirty minutes of trading. For an option trader it doesn't really matter why. How do you profit on such a move? It's a Thursday. Do you buy "Calls" that expire tomorrow? No, you look one week down the road.
Did I buy any? Well I wonder if the dip is so significant that any kind of a rebound will be a struggle. I would buy the stock now but not the options on it. If you buy for example ten of the "Ford" eleven dollar "Calls" for May 21st you will be shelling out lets say $460.00 for a position that might be worth $660.00 on a twenty five or thirty cent rebound. Numbers like that don't excite me very much. Perhaps the "Calls" six or nine months out or so would be a better way to go. Here is a look at a January series of "Call" options. Look at how much they sold off in one hour of trading time! For options nine months out that's a big deal.

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What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
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