CAT Puts

Look at this chart. Do you recognize something a little bit different in the striking prices? They have changed and here is proof. Forget playing the 12, the 12.50, the 13 and the 13.50. Calls or Puts. Now they are all 11.85, 12.35, 12.85, 13.35 Calls or Puts. What is now different is that the striking prices have now shifted downwards by .15 cents or upwards by .35 cents depending on how you look at it. Does it make any difference to option players? Has it become slightly more challenging to do the math? Not really as everything functions just the same. Just learn to get use to it. That said, here is how the stock Ford is now trading in February. . Now look at these same Call options on the morning of Tuesday February 22nd two trading days later. The market tanked on Monday and the executives at Ford are making comments that are casting their operating realities in a bad light. Institutional investors have limited patience for these kinds of outbursts. Then this. Ford's pu...

Let's start with an observation. When I see this kind of a chart formation, a one day spike upwards it makes me cringe. I don't like it and I instinctively want to play it on the downside. Do you think this is a stupid bet to be making? Not really if you believed the fresh enthusiasm was an overkill? I did. Roku jumped on Thursday on a "so-so" earnings, well really a "lost" report. The numbers were not that great. Disney and Netflix and many other stocks in this space are prone to jump up and down quickly. It's a constant battle of winning or losing subscribers. Analysis watch the action closely. When stocks jump up like this, there is a tendency to see a second wave of buying come in the following day. In spite of that assumption here is what I decided to do. I wanted "in on the downside" and the vehicle I chose was a Put option that would be expiring the next day. That's aggresive. I bought one Put, the 74 series of Puts at 10:34 a....

Here is what the market is doing just minutes after the opening. Not much. It's a Friday and I am looking at options that expire today and also looking at options one week out. I will talk about "next-week-options" later. Monday will be a holiday. Here are my trades this morning and a picture of me. When I trade on Friday's it's always the first fifteen minutes of trading that are the most interesting to watch and try to play. Except that is when everything is going down. * Telsa blasted up in the afternoon and the real action was in the Calls. I was lucky on that one to make money on a Put. Buying Calls on the opening that expire that day seems kind of dumb yet that's where smart money went. Look at the Call volume numbers. Lucky on Visa also as the Calls I bought ended up expiring worthless. I was playing the 225 Calls between 9:47 a.m. and 10:36 a.m. Boeing closed at $396.00. I didn't hang in with long enough after it came off a morning dip. On Fr...

Let's talk about Boeing. The stock was down $1.01 on the day. Here is it's early morning chart. Call you see it drop a touch before 10:a.m.? Now here is it's chart on the day. Here is what I did. In at 9:45 a.m. at $365.00 about ten minutes to early and in at 10:04 a.m. at $305.00 just as the stock started to rebound. That was good timing. I was buying the 215 Calls which expire in three days. That was a chunk of money and what I was really hoping for was a $2.00 quick rebound. That didn't happen and I quickly found myself babysitting something I really didn't want to be in. You can also see my second buy in above. Now check on the chart to see the action between 9:30 a.m. and 11:30 a.m. when I was in this position, now with two contracts. I got tired of waiting and I was lucky to get out before the selloff that happened around 12:30 p.m.. You can see my sell ticket and it's timing also on the ticket shown above. Out of both contracts at $380.00 with one sell...

First some news as the markets opened. Horwmet Aerospace offered this sobering news. Then good old Joe made this statement. Now the opening chart. When I see opening charts like this I always want to play it in the opposite direction. What was my take on all of this news. New contracts are great, people are flying again and ticket prices are up. It's all good but Boeing doesn't really need more deals and orders. They are still trying to get back on track. Would this morning bounce go away? I thought so, I jumped in on Puts. In at 9:45 a.m., 9:48 a.m. and 9:50 a.m. . I was confident in what I was doing but the stock seemed to stay persistently high. Then I got frustrated with how it was trading and bailed out. I sold all four contracts at 10:42 a.m. at $2.61 per contract so I only made a touch. I was in this position for just under an hour and was starting to worry about a second wave of buying coming into this position. This chart above illustrates how they jumped higher...

I don't like buying Call options on Monday morning that expire on Friday. I tend to find them to expensive. Something unusual happened this morning. There was an announcement. Here it is. February 9th was a Thursday. I congratulate Caterpillar for holding off until the Monday after, today to release this news. Can you imagine announcing it last Friday at noon and having short term Call option holders getting wiped out. So what happened on the opening to Caterpillar today? It tanked. It tanked however it rebounded as the index closed super strong. Now look at how low the Calls traded on the opening and how they came back. I watched it happen but opted not to play it. They opened at $3.90 and dropped to $285.00 before they jumped up. It's not every Monday the D.J.I. rallies over 376 points. Two thoughts. 1) Releasing this kind of news on a Monday morning shows shewardship. 2) I opted not to play it. I don't like buying one week Calls on a Monday morning. That's just m...

In option trading traders get a fair deal on wednesdays if you can capture the right directional move. Stocks can pivot on the day and pivot on a dime. Case in point is Visa. First, look at how it was range bound on the opening. Yet range bound enough to play it. Look at the dips it had in the first ninety minutes of trading. Here is what I did. I played a dip down. In at 10:55 a.m.and out at 11:08 a.m. That's thirteen minutes. Buy five Put contracts at $100.00 and out at $127.00 Points to consider. 1) Market swings like this only seem to happen in morning markets and not afternoon markets. 2) Wednesdays are the best day of the week to look for this action on options that expire two days away. It's like the tippng point of the week and the smallest directional move causes the options to reacte. Now here is how the stock closed the day. Lets now look at the action going into Thursday. Here is how the stock looks in premarkets bids at 5:38 a.m. Watch the 230 Put series as t...