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McDonalds Again And A Follow Up To Yesterday's Blog..

Option traders on Friday mornings just want to be in and out in the first hour or so of trading on short term options. In the second half of the day most of the action calms down. McDonalds sold off a little bit yesterday afternoon and firmed up a bit towards the closing. Could this "mostly downward trend" continue? Here is a partial look at some of the opening bell's activity. Today is a Friday however let us first look at how the stock traded yesterday. Now a look at it's trading pattern at 9:32.22 a.m. The McDonald stock jumped up $4.98 and the 317.50 Puts we followed all day yesterday which are now "out-of-the-money" acted accordingly. They shrunk in value. During the fist 2.22 minutes of trading they traded down to 34 dollars a contract. Now this. In the first three minutes of trading the stock jumped a bit and then started to come off a touch. These Call options where not attacting all that much attention. The bid and ask jumped up on no volume. ...
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Deere and Company and a Bounce On Earnings

Deere bounced on Friday on earning reports. On Thursday the stock closed at $372.27 and the 370 Calls which expired the next day closed at $875.00 That's kind of rich, right? Now here is what happened.
Now the 370 Call option series.
Remember that the 370 Calls closed at $875.00 the previous day. Look at how they jumped to just over $22.00 on the opening bell. Over a double on your money. Profit takers then came in to drive the price down as this was expected news. Some traders play options like this. Others do spreads, where they will sell an "out-of-the money" Call and an "out-of-the-money" Put that expire in one day on Deere at the same time and hope they both expire worthless. More about that knd of trading at a later date.

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