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A Random Walk In The Park On A Monday Morning. A Caution. Monday Mornings Are Often Not An Option Players Best Friend

Let's start with this. It's now 10:26 a.m. A bet on Caterpillar rebounding by the end of the week. There are no takers. Why have to watch the screen for the next four days in agony waiting for a rebound which if happens is just a "break even trade"? But Wait. I made a mistake. The market is actually now down 668 points. What else can we look at? Interactive Brokers. These kind of stocks always do poorly on days with the threat of margin calls. Yet there is something interesting about the printout I am about to show. It is that these options are "one-month-out" Calls. These longer term options trade differently than short term options. (these options trade in one month intervals). If the stock we are following stops it's freefall the value of the options will nudge up ten, fifteen or twenty percent. A seven dollar option Call might creep back up to $8.00 or $9.00 at which time it could be sold. In contrast with a five day option a slight reversal in ...
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Ford 15 Calls

Yesterday I posted a blog called Ford 14 Calls. Please read it to better put this blog into perspective. Here is the action this morning.Call it the perfect storm. $500.00 in to like $4,400.00 in 90 minutes of trading.
Why did this happen this way? Well these option expired this day so if your buying in at 9:32 a.m. you only have a matter of hours to get it right. I talked about the Ford 14.5 Calls yesterday and how they exploded up. Today was a continuation of this excess exuberance. Will this occurance repeat itself next week? No. Next week series of Ford 15 Calls will be expensive to buy into because you will be paying for 4 or 5 days of trading time. The kick we saw today was a one time thing. ** Please press the upper left back button to read one of my most recent blogs about the Ford 14.5 Calls.

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