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The Crazy Action In Tesla

First, look a it's five day chart. Big jumps everyday. If you try and jump in and play the downside everyday you will quickly get beat up. Here is one look at the Tesla 235 Puts on Wednesday at 9:34 a.m., only then to check out the same Puts a few minutes later at 10:15 a.m. How do you know what to do? Well you don't fight stocks up over $8.00 in the first thirteen minutes of trading. Now here is how these Puts closed out the day. Look at how the volume poured into these Puts over the day and look at the small closing "open interest" numbers. The game is to sell the Puts when the stock is rising and then cover them to be out of the markets at a profit by the end of the day. It's not the small fish playing this game. Now today is Thursday July 4th and the markets are closed. Tomorrow is Friday July 5th.These Put options are now "out-of-the-money" by $6.73 and these Puts will be expiring at 3:00 p.m.. If Telsa opens down two or three dollars on the op
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Caterpillar "Calls" and an Introduction To Pre Market Trading.

What an exhausting week for seasoned option traders. It's not over yet. Here is a trade I entered into today Thursday at 3:59:32 p.m. Here now is it's five day chart. I could have purchased "Mcdonald's" instead, it's about the same price. Let's see what happens tomorrow.
On a differing note, "Elon" can't be to happy these days with the way his stock is performing.
Part two of this blog. It's an introduction to pre market option trading, something I seldom talk about. When you google "when is the best time to trade options" what comes up? When I did it and here is what I found. Pre-market trading can be very deceiving and should only be reserved for seasoned experienced traders. The most viable types of stock worth trading pre-markets are gapper/dumper stocks, usually during earning season. When I read this type of stuff I get a little bit upset. How are option traders to learn anything from this kind of Mumbo Jumbo? If you come back tommorow I will tell you a story about my "pre-market" trading in "Caterpillar" today. **** Part three of this blog. I want to talk about the 3:59:32 p.m. trade I referred above. This will be a good example of a pre market trade. Here is how the futures looked Friday morning before the opening bell.
What a perfect time to be illustrating an "at market" pre trade knowing that I will not most likely lose any money. With a pre trade ticket there are no "Bids" or "Ask" on the screen so you can specify a price you are willing to sell it at or you can just go in "at market". I did it "at market" to show how it works. Below are two fills, one showing my "at market" ticket for two "Caterpillar Calls", two of which I purchased just prior to the previous closing and a second sale of another two, one being the "at closing" Caterpillar "Calls" and one being a contract I picked up earlier in the previous day.
I know it's difficult to read but the report of my pre market fill came in at 9:30.04 a.m. which is very impressive and the second fill was another 9:32.30 fill. Was I happy with the first fill number? Yes because if you look at the opening chart "Caterpillar" only opened a touch higher at 242.20 after closing at 241.86. Here is a chart of it's action on the Friday morning opening.
What's missing from the printouts of my statements is what time that I placed the order. It was around 8:45 a.m.. forty-five minutes before the opening bell. Why do they do that? Why don't they show you what time the fill actually happened at? I think it has something to do with protecting themselves in case of any price issue disputes going forward. That's only a minor issue. Does all of this leave you scratching your head wondering what I am talking about? In this case I am showing how I went into a Friday morning trading session with four "Caterpillar", "Call options" which expired that day, three of which I purchased only seconds before the close on the previous day and how I came out of the experience with a profit in the first ninety seconds of the trading session. In retrospect had I held onto my positions for thirty minutes or so I would have made more. Also in retrospect I could have bought in again after the dip on the opening like I talked about doing last week at this very same time. Oh well. My point is that pre market trades are done fairly and going in "at market" shows the respect some people like myself have for the system treating all selling tickets fairly. That's a perspective gained from making thousands of option trades over the years. Should I have traded "Mcdonalds" instead of "Caterpillar"? Well here is it's chart and a comparison of how it did on the day.
With both postions selling out in the first thirty minutes of trading rather than in the first few minutes of trading or in the pre markets would have being a better way to go.
More about pre market trading in future blogs. Using such a technique surely does free up your day for other things. Here also is an end of the day printout showing that other opportunities existed to play the 230 series of "Calls" on Caterpillar on Friday.

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