Featured

Opportunities Presented by Options on $30.00 Stocks.

Let's start with this chart. It's Pfizer. Would you have expected a pop like this, this morning? Now look at what the Call options did. I don't want to get into a discussion of "Can you read charts" however after one nice rally yesterday and second follow up rally could be expected. The 29.50 series of Calls doubled on a strong opening this morning. "Out-of-the-money" Calls on stocks in the thirty dollar price range call sometimes suprise.
Post a Comment

"Puts" on Caterpillar and The Lion Electric Company

I wanted to call this website "CatCalls" but "Go Daddy" wanted a couple of thousand for that name. Instead I went with "CatPuts" for about twenty dollars. My license plate says "Catputs". Why am I now mentioning this? Well I missed the greatest "Caterpillar" sell off in price so far this year that all happened in the last five trading days. I bought into Calls instead at about lunch time last Monday. My logic and timing were off. I went against my principles of not purchasing "Call" options on a Monday mornings. Here is it's one week chart, it's one year chart and the Deere and Company five day chart. "Caterpillar" dropped twenty dollars in one week or 9.5%. Each day it dropped.
I like playing the Calls and Puts on Caterpillar because as I have mentioned before it is not a stock prone to directional moves based on chit chat. So on Monday and Tuesday I scoured the internet with no luck looking for news on what might be the cause of this unsual decline. There was nothing to be found. The IMF estimates that the global economy will expand 5.8% and the U.S. economy by 4.7% in 2021. Many of last weeks short term "Put" options on "Caterpillar" increased in price ten fold. Analyst are now saying to stay away until it finds a base. The stock has had a good run and as it turns out I got burnt trying to play the top of the market. Stuff like this happens. Next, do you know about a stock with the symbol "LEV"? It's "The Lion Electric Company" which is Quebec based company. They build electric vehicles yet their business model is flawed for the reasons outlined before. Yet traders are buying Calls on it most likely because of it's recent dip.
Orders on the books for over 1,000 vehicles while deliveries of 24 vehicles in the first quarter of 2021 and 2 in the first quarter of 2020. What's going to drive the stocks price back up when their production numbers are so poor. Nothing. 24 or 48 or 96 vehicles is not enough to turn a profit. It's that simple. Now also in the works is the construction of a $185 million dollar electric battery plant next to the Montreal-Marabel International Airport. How are they going to pay for it? Government support? On the surface it seems like they have too much on their plate. Why not just focus more on getting trucks out their door? Incorporated in 2008. That said, it's difficult not to be impressed with how they have gotten this far. The bottom line is that investor's can't wait forever to see profits start to role in.

Comments

Post a Comment

Popular posts from this blog

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slighty out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-mas
Read more

The Crazy Last Day of Option Trading In Tesla.

Image
First, look at 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 for example 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 running up over $8.00 in the first thirteen minutes of trading. Now here is how these Puts were trading at 12:59 p.m. 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 will be expiring at tomorrow at 3:00 p.m. If Telsa opens down two or three dollars on the opening there is the potential for a small reaction. They will still however be extremely "out-of-the-money". They might jump a touch i
Read more

Deere Lays Off /Tesla / Eli Lilly/ Home Depot/ Nio

Image
It was announced today, a Tuesday that Deere is going to lay off some of it's workers. Perhaps that news was leaked out last Friday and that's why it could have sold off last Friday afternoon. The stock basically has done nothing over the last three years but some traders love it for it's thirty day swings. I have talked about Deere before. The markets were accepting of this news. In other news Tesla Call option traders are rejoicing. Image getting in two trading sessions ago at $196.00 to watching it shot up to over $230.00? This was (it's up in the premarkets again) the Telsa trading opportunity of the year! Then there is upside movement in Eli Lilly. But then there is this background news. Now this. Talk of a hurricane. Will Home Depot go up? Then there is Nio. It's shares trade huge volumes and the stock has a wide following. Might it trade back up to $6.00? It's down almost half price on the year. One of the problems in trying to anticipate what m
Read more