CAT Puts

A rough opening this morning. A news release which I thought wasn't all that bad. Rising sales during a period of covid! A further morning decline in a market which was holding it's own in the first hour of trading. What to do? Why not buy a Call with one week to go? Here is what they cost at 10:13 a.m. and here is what the five day chart looks like as of 10:30 a.m. But wait. The markets sometimes turn south in the afternoon and more importantly the trading volumes on Friday afternoons often dry up. Look at how the markets (the DJI is selling off). Might it drop more on the day? Why is there now a rush to play the upside? There isn't but look at Walmart and Netflix. They both have a similiar story. We will soon be going into a Friday afternoon, which is not a period of time when the markets tend to rally. My interest in looking for a rebound is now waning. Here is how these Calls closed out the day. The problem now is that this particular series is now to far "ou...

Back in 2019 when this Canadian stock went public (Symbol SNDL) it traded for eight dollars a share. It didn't stay at that price level for very long. Look where it is at now and look at how it continues to slide downwards. Does it look like its going to turn around in the near future? The companies CEO seems to think so given what he says but in 2021 they lost $232 million and their sales were flat. It'a Calgary based company with 580 employees (2021) trying to dance to the changes in the marijuana industry. You see marijuana companies are scrabbling to find new ways to sell their product. Growing it is now not the issue. Being able to find channels of distribution to move the product is now the difficult part. Everyone talks about building "brand recognition" but for a number of reasons including packaging and advertising restrictions it's difficult to differentiate yourself from your competition. Thank goodness for most major growers, in this industry the ...

May 2nd. I want you to look at the insignificant amount of open interest Call positions on Caterpillar this Monday morning. There is not much going on and the markets are relatively flat. Retail option players are for the most part burnt out from the craziness of the markets over the last month. The open interest in the Puts is slightly larger than the open interest in the Calls. Most of the time the reverse is true but these numbers are relatively low. Now let's look at Boeing. Are you able to see something strange happening in one of these three series of Puts? It has to do with the "open interest" numbers. The 144 Puts and 146 Puts have little trading but the 145 Puts are on fire. Notice the high volume of the 145 series of Puts trading. What's going on? Is this going to be an in-and-out trade that lasts only a few hours? Is it based on technical analysis or insider knowledge? It's only affecting one series of Puts. It makes you wonder and we will have to wa...

When I was reading about "Sundial", a Calgary based marijuana stock I came across these rules and how they are applied. Watch for a future blog about Sundial, a stock with 2.06 billion shares outstanding.