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Walmart Again

On Monday I did a blog on buying this week's Call options on Walmart for a morning move. Today is now Thursday and there was a big sell off in the markets yesterday. Tesla sold off for example and here is what happened to it. Today it is slightly rebounding as are so many other stocks. Thursdays however as oftened mentioned in recent blogs are not a good time to be purchasing one day options on stocks that expire the next day. Times change. In less chaotic times that's not always case. In the last few years there would be known upcoming Friday morning events like the release farm payroll numbers or other economic readings that would move the needle on the markets going up or down on on a Friday morning. In those markets it paid to get into option positions before the closing on a Thursday to get out on the Friday morning bounces were caused by the release of these premarket reports. So how is any of this revelant to Walmart's trading today? Well, there was a whole bunch o...
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Boeing and Caterpillar on a Friday. My favorite Day of the Week for Trading.

Omicron variant fears. What a week. Boeing down more than ten dollars in one day and then back up that much again the very next day. Why is Friday morning so special to short term options players. It's win or die. Will one of your favorite stocks shoot to the moon? The clock is ticking and with the passage time option prices change. What I want to show you is an example of how quickly things can happen. Here is a chart I saw of Caterpillar on this Friday morning, December 3th, 2021. It's about that time of the day when you start to realize it's abilities to shoot up the 200 dollars mark and over will never happen. To bad for the option traders buying the 205 Calls on Caterpillar on the opening today hoping for a ten dollar price swing.
So now look at this, a cancellation of a "buy order" on Catipillar Calls 197.50 Calls at about this particular time. They were the ones going crazy. I changed my bid upwards about three times as it shot up and then gave up. It went from bid .45 -ask- .50 to bid .88 -ask- 1.08 in about three minutes. I gave up after offering .49 on a bid .45 -ask- .50 and increased my bid three or four times up to a bid of .70 .
Now I want you to go back and look at where Caterpillar was at around 10:58 a.m. Can you see how quickly it moved up in price?
I started in the high forties cent range and moved up from there and missed the blastoff. I should have just started "At Market" when it was bid .45 ask .50. I saw that and was watching it all happen. Here is a chart of Caterpillar on the day if you look closely you will see that these Call options, the 175.50 series of Calls then went to trade for over two dollars a contract. Look at the timing of how quickly this all happened.
Was I upset that I missed this action? Not really, a little bit later I went on to make this trade. I was in it for about twenty-two minutes.
Are you now better able to appreciate how this is just the tip of the iceberg as to what happens with "last day" near-to-the-money Calls and Puts options. * Scroll to the top left and click to see other recent blogs. My last Sugarbud blog is a good read.

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