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

Some option traders on Friday mornings just want to be in and out in the first hour or so of trading on short term options they feel comfortable trading. In the second half of the day most of the action calms down. Take your winnings and run. McDonalds sold off a little bit yesterday afternoon and firmed up a bit towards the closing. Could this "mostly downtrend" continue? Here is a partial look at the opening bell's action, today 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. Now this, McDonald's jumps up $4.98 and the 317.50 Puts we followed yesterday which are now "out-of-the-money" acted accordingly. 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 started to come off a touch. These Call options where not attacting all that much attention. The bid and ask jumped up ...
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Ford Earnings - This Game Repeats Itself Four Times A Year

They should be up right? Supply issues are getting better and their electric trucks are coming. Ford released their earning report yesterday after the close and they were good.
A 20% increase is a decent increase. The stock should rally on that news, right? But wait. Remember in a blog a few days ago how Caterpillar tanked on the morning after a great earnings release? To refresh your memory here is what that chart looked like.
. The Ford stock trades in an interesting price range. Price swings of fifty cents on a twelve dollar stock can send option prices into a tisy. So here is what happened. Remember earnings came out after the closing bell yesterday on May 2nd.
The stock surged Monday morning up to $12.25 and that was the time to be selling out of the Calls bought on the previous Friday. Now let me digress for a moment. G.M. had an earnings release on April 25th and their profit were up substantially. This helps support the thesis that the automobile industry is on a month to month rebound. Buying Ford Calls last Friday would have being a smart calcuated risk. Look at the chart once again. Do you notice a surge in the last few minutes of trade of share buying in Ford at the close yesterday just before the earnings came out? New players were coming to the party hoping for a positive reaction to the release of this news. Here is how they made out. The stock did pop on the opening. Here is how the stock traded in the first twenty minutes of trading. Profits in the Calls happened.
One closing note. Look at this chart on Ford a few weeks back.
Playing options on Ford isn't always a walk in the park.

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