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A Look At "The Bids And Asks" On Two Different Series Of Put Options That Expire In A Few Hours

On July 3th the markets were closing at 1:00 p.m. with July 4th also being a holiday. Many traders were disconnected from the markets. It is holiday time. Let's look at these two different option series. 1) Boeing. It jumped up in price over $4.00 in early market trading. Boeing does that sometimes on Fridays. It's 10:15 a.m. and here are the slightly "out-of-the-money" $215.00 series of Puts which are just over $1.00 "out-of-the-money". The stock is at $216.21. These Puts expire in less than three hours. If Boeing started to give back some of it's gains these Puts could be worth big money.The stock is at $216.21 and the striking price of $215.00 isn't really all that far away. Look at how cheap these Puts have suddenly become. What ended up happening? Here is a summary of how Boeing end up trading on the day. Boeing never ended up selling off to below the $215.00 price range. The 215 Puts ended up expiring worthless. *** There was other ac...
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Boeing and Trading Platform Failures

Monday mornings. I try and stay away from option trading on Monday mornings but this time I thought I could catch the upside on Boeing on a weak opening. Here is the premarket quotes at 9:08 a.m. and here is the premarket by ticket I placed. At 8:02 a.m.I placed a bid of $2.52 when the premarket at that time had Boeing trading down by about two dollars a share. I was trying to purchase a Boeing 225.50 Call which would then expire at the end of the week. I was being a bit stingy with my order but it was an experiment. It must be mentioned that when your placing an order in the premarket there are no "bids' and "asks" so you have to pick a price you feel comfortable paying. Thats what makes the exercise tricky. How much lower will a Call option open than it closed on the previous day? It depends in part apon how many days it is away from expiring. The more days further out the expiracy date is the less it will go down in price. That plus you don't get an instant fill. You have to wait a minute or two until after the opening bell to find out if you got what you were trying to buy. It's not really a perfect system but that's the way it works.
So what happened, did I get my fill? Something really strange happened. Look at this update on Boeing twenty three minutes into the trading session. What do you notice in the printout of how this series on Call options was trading?
At 9:53 a.m. there was no bid or asks posted and no trades. A technical issue of some sort took down the system of all option trading. How strange is that? Imagine if that was to happen on a Friday afternoon when you where trying to close out a position? The bottom line is that not only can your brokerage company have mechanical issues with their platforms, so to can the entire system provider for the exchange itself. In this case the system was down for over an hour. What happened to my little ticket to buy? Boeing ended up charging up on the day and I never got a fill.
Now a follow up to my last blog on Lowes. I talked about how it rallied last week on the news of lumber prices crashes. Well over the weekend news surfaced on forest fires and railway lines out of commisission because of fires on their train tracks. Shipping lumber out was suddenly an issue and the spot market for lumber was shooting back up because of the continuing fires. Here is how Lowes reacted to that news on the opening.
Would that have made it a great time to buy into the upside with options on the Monday morning after a quick selloff? Perhaps, however once again the trading platforms were down.
Such is life.

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