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What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
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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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Living on Kraft Dinner?

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What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
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