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Living on Kraft Dinner?

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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Let's Think about Going For a Ride "Boeing"

Monday was a long and sideways day for "Boeing". Things didn't look so great an hour into this mornings trading. Here is it's one day and five day chart. It's first quarter's earning report is now history.
Here now is how one series of options traded on it. The "C" stands for "Calls" and the "P" stands for "Puts". Look at how the daily trading volume on the "Call" side is so much greater than on the "Put" side. Also look at how the open interest are smaller than the daily volume of options traded. What that tells us that traders are playing interday swings. It's safer not holding onto overnight postitions. Do you want to be part of this action? The nice thing for Monday traders on short term "Call" options is the safety of having four trading days left in this series.
Let's check back at 10:30 a.m. tomorrow to look for a playable swing. I missed 10:30 a.m. self imposed check in time. Here is the action at 10:45 a.m. The DJI was down 275 points. Was 10:30 a.m. was the time to get in? You decide.
Yet another look at noon. Does it now look like it wants to bounce?
Here now is a look at another series of "Puts", the 240 series of "Puts" at 12:20 p.m.. Does this now give you a better appreciation of the power of playing the downside?
Now it's 2:10 p.m. and here is what I did. I got out of what I bought during the morning. Why did I get out? One reason is that this is a teaching website and I want to show my readers that short term traders can poke away and eak out small returns. Are you also able to see how at about 2:45 p.m. it looked like the rebound was slowing down. It's difficult at times to be riding a wild horse.
In at $3.40 and $2.85 and out at $3.72 .
**** an end of the day update... the markets came charging back and I got out to soon. Here is what these options ended up closing at. More about my thoughts on this later. This turned out to be an exciting day for mid week option traders.
It's strange how noon time turned out to be the low of the day.

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