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Climbing The Wall of Greed.

It's a stupid market with stupid things happening. It's exhausting. Investors have to change out their investment strateties. Caterpillar and Deere had big gains this week and one week Call options on both of them went up in price 400 percent. In recent blogs I have talked about things like coming late to the party and making trades where you would make out like a bandit. Look at this mornings action in "Unusual Machines". I have talked about this stock before. Now this. A look at the Call options on "Unusual Machines" at 9:31 a.m. this morning after the stock jumped $1.57 on the opening. These Call options jumped 300% from their close on the previous day. Also look at the large open interest in these options. These Calls still have one week's life left in them. The question now is who would you be stupid enough to be throwing more money into this? Not me after all this that has happened. Now this. In forty four minutes the Calls that were already u...
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Lowes / Apple

The first trading morning of the week are always difficult to play because the premiums on Call and Put options which expire on Friday are always excessive. In this instance Monday was a holiday so today, Tuesday was the first day of the week. I found myself focused on 'Lowes' because it was dropping in price when everything else I usually follow seemed to be going up. I had played it last week. Here is what I did.
In at 10:53 a.m. at $4.06 and out at 11:53 at $4.63. A one hour trade. Here is it's chart, I caught the rebound.
What was odd about this trade? Well look at how few contracts traded early in the morning.
Only one contract traded in the first ten minutes of trading and at 10:53 a.m. only two contracts had traded. In total there was only thirty five outstanding contracts. What a crazy low number.
Contrast these open interest numbers and daily number of contracts traded to the action on the day in "Apple". The numbers you are about to see are shocking.
63,361 contracts ended up trading on this series of Call options in one day with an open interest at the end of the day of only 4,565 contracts. So many traders are making this series of options as "go to" options looking to capitalize on daily market swings. They are inexpensive, move up and down quickly and offer instant liquidity. Playes sometime purchase them in quantities of one hundred or more at a time. Here is "Apples" one day chart.
I did a feable trade in it and got out and broke even. it's all about catching an interday swing and getting out. Here is how they traded on the day and here is what did. I was lucky to get out and call the trade a wash. It ended up closing lower.
The takeaway on all of this is that traders are now using "Apple" Calls as a trading vehicle in a big way.

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