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A Random Walk In The Park On A Monday Morning. A Caution. Monday Mornings Are Often Not An Option Players Best Friend

Let's start with this. It's now 10:26 a.m. A bet on Caterpillar rebounding by the end of the week. There are no takers. Why have to watch the screen for the next four days in agony waiting for a rebound which if happens is just a "break even trade"? But Wait. I made a mistake. The market is actually now down 668 points. What else can we look at? Interactive Brokers. These kind of stocks always do poorly on days with the threat of margin calls. Yet there is something interesting about the printout I am about to show. It is that these options are "one-month-out" Calls. These longer term options trade differently than short term options. (these options trade in one month intervals). If the stock we are following stops it's freefall the value of the options will nudge up ten, fifteen or twenty percent. A seven dollar option Call might creep back up to $8.00 or $9.00 at which time it could be sold. In contrast with a five day option a slight reversal in ...
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"Out-of-the-Money" Call Options on Boeing With One Day to Go

Who likes trading options that expire that day? Let's move forward. First here is the five day chart of Boeing prior to it's Friday morning opening.
It looks like it could bounce. Part two, here is what I did. Look at times I got in.
In at 9:32.34 a.m. at thirty-two dollars each on four contracts and out at 9:43.07 a.m. at sixty-nine dollars each and also in at 9:34 a.m. at forty dollars each on two contracts and out 9:44 a.m. at seventy nine dollars.
These are ten minute trades picking off doubles in price. Here is a screen shot of how Boeing was trading during this particular period of time. I caught part of a one dollar early morning move up holding "out-of-the-Money" Calls. the ones that move the most percentage wise when they only have about six hours of trading time left in them. That is something to study.
Had I waited another ten minutes to get out I would of had given up all of my profits and had I held on to these positions until the end of the day I would have lost everything. Here is a one day chart on how Boeing traded.
Here is a look at how this series of Calls, the 212.50 Calls traded on the day. Eighty Four dollars was the high of the day.
The real winners in this secenaro were the 207.50 Puts. That's a different story which would have taken guts to play.
Movements like this happen every Friday.

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