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Two Hour Options On A Friday Afternoon With The DJIA Down Over Three Hundred Points

A stupid move? Right? Maybe. The thought of buying options that expire in two hours. Let me try to explain something that might be missing in your thinkings. Here is a list of five strong stocks that everyone knows about from watching the markets of 2024. Apple, Tesla, Alphabet, Amazon, Microsoft, Meta Platforms and Nvidia. If a retracement of a morning selloff is ever going to happen on a Friday afternoon odds are you should be watching these ones if you are a short term option player. Last Friday, as mentioned in my previous blog the DJIA was down 333 points. Here now is a one day chart of Meta on that day which was Friday December 27th. Hone in now (hone is a word seldom used) on the 12:30 p.m. time period which is 2.5 hours prior to when Friday's options will expire for retail traders. One week out options are also interesting options to consider at this same time period because they would also benefit from an after rebound or the firming of the markets after a morning drop. T...
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Rethinking Setting Up A Deere Position One Week Out

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 "out-of-the-money" to consider.
Here is the closing one day chart.
Fridays in general are not good times to be looking for reversals. These markets as of late are wicked. Deere lost $51.31 on the day. (This chart doesn't show the lower gap opening which was a big chunk of the loss on the day). Walmart also lost over $25.00 in one day a few days back. It's a market where everyone has lost money. Clear skies will be slow in coming back.

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