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Costco Drops On A Friday Opening And McDonald's Goes Up

Here is what happened. Costco goes down on the opening. Charts like this is not pretty. McDonald's goes up. Confused? Why the interest in McDonald's? It's just junk food. If the market rolls over might this stock lose some of it's steam? Now look at these Puts? The volume of trading in them is next to nothing. Without knowing why it's going up makes the purchase of Puts too much of a gamble. Now lets look at these same Puts at 2:24 p.m. They got wiped out. What's Costco doing? Here is where things get interesting. The markets are still strong. Costco is down $74.24 around 2:23 p.m.! It's having a bad day but the stock now seems to be stabilizing. Now this. A look at it's Calls. Remember for retail option traders you're deadline to get out of these "last-day-to-expiring" options is 3:00 p.m. That's only 42 minutes away from the time of this printout.That doesn't give these options much life. Now consider this, after such a se...
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How The Big Option Traders Made Money This Morning

In most of my blogs I poke around talking about speculating in options on five and ten stocks and sometimes talk about the action in Boeing or Caterpillar. It's all kind of introductory stuff. This blog is different, it's about Amazon, a stock that trades in the $3,500 price range per share. To rich for your blood you might say? I agree but that is where the action is for many of the sophicated option traders. It's big money chasing big rewards. Yet the basic premise of how things work remain the same. This week there are weekly jobless claims reports and the Institute for Supply Management readings on manufacturing activity for the prior month, amongst other reports. The first few days of any month are always busy days of economic reports.
Amazon sometimes exhibits the jitters and it can sometimes be blind sided by bad news. Bad news can send the stock down seventy five dollars in one day. Here is it's trading action yesterday. It gained $8.00 on the day but it was down $25.00 in the last two hours of trading. That's the jitters I am talking about, sellors getting out before the release of job loss/ gain numbers.
So hear we have a stock closing on a Wednesday at $3,479 per share. Would you have the guts to buy in just prior to Wednesday's close a Call option with a striking price of 3,500 which is $21.00 dollars "out-of-the-money" that expires in two trading days? Here is the series of option contracts I am talking about and here is where they closed. They closed at $11.20 a contract with over 31,000 Call option contracts trading on that series in one day! Then in the next the next printout I will show you what price they traded up to on the Thursday morning opening market. Look at how these options jumped up in price.
$11.20 to $19.55 just after the opening at 9:34 a.m. Amazon jumped up $22.00 on the opening. Some option traders trade in a different league.

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