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"Tony The Tiger" - A Food Stock

The mood of Wall Street is now changing as the reality of tariffs is starting to kick in. Two weeks ago not so much so. Kelloggs had "so-so" earnings come out a few weeks ago and the stock exploded upwards. Note the very last line above mentions the effects of tariffs are not taken into consideration. So many stocks with "so-so" earning reports have jumped in price based on the "lets make America great again" slogan. Deere stock is shooting to the moon as I keep writing about in spite of declining sales in the last quarter. The sentiment seems to be that they are immune to tariffs. On paper they might be. Read this. Americans are struggling to buy gas, eggs and insurance. Total housing starts in the U.S.in 2024 were down 3.9%. Walmart, the recent darling stock in the last four weeks for Call option players woke up this morning with an earnings report which was healthy but with came with some caveats. Here is what happened. Perhaps the U.S. is starting ...
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Towards Understanding the Bids and Asks and a Look at Friday Morning Reversals on An Option That Expired That Day.

Trying to get a fill can sometimes be an exacerbating experience. On Thursday of last week I wanted out of a Caterpillar 175 Call and had to cancell and wait and resubmite my ticket three times. Why? Whenever my sell ticket would pop up halfway between the bid and ask they would bump down their bid. Cancel my ticket and the bid would move up again. Now take a look a this quote. This time it's of Caterpillar last Friday thirty nine minutes into the trading session.The stock was clearly dropping.
At 10:09 a.m. Caterpillar was going down in price after a slight morning uptick. Look at how wide apart the "Bid" and "Ask" where on the Caterpillar 180 Puts. If you want to buy in and place an order of lets say $1.40 what do you think will happen? Watch the bid jump to $1.40 and the ask to $1.65. If you let it sit for a couple of minutes and nothing happens you might decide to cancell your order. What typically then happens is that the bid and ask will drop down again, perhaps to bid $1.20 ask $1.49. It then becomes a bit of a game of cat and mouse. The net effect is that the house wins. Why? Well these are Puts and if the stock starts to drop in price then you are shut out of the action. By keeping you out of the action your not catching a strong directional move. Now look at what happened. In this instance, these Puts in the $151 range ended up trading as high as $239.
Here now is it's one day chart.
Lets now go from the 10:09 a.m. printout to the 4:00 p.m. printout.
Once again. the high on these Puta was $2.39 which doesn't leave much profit if you bought in at $1.51 range on small quantities. The name of the game would be to buy in during the first five minutes or so of trading before it's reversal downwards actually started to happen. These options traded down to a low of $.43. You can see all of this better if you look at it's five day chart as shown below.
It closed Thursday at 183.14 and jumped slightly in the first few minutes of trading to 184.33. That's when you would have had to jump into the Puts for like $.50 a contract to triple your money in the first hour of trading. Yet then again, that's what last day option trading is all about. Who would be brave enough to be purchasing the 180 Puts that expire that same day on a stock heading up to the $184.00 price range? Some people would, knowing that Caterpillar had dropped on the previous opening to under $175. Friday mornings are the best time of the week to catch this type of action. You have to be glued to your seat if you want to attempt this type of trading.

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