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If a Stock Drops 10% In One Day Can You Play It For A Two day Rebound?

Here it is. Here are the 240 series of Calls that expire in two days. $565.00 U.S. is a lot of money to shell out as an experiment. Now this. The next days action. Half of this options life has now disappeared. Now a look at its five day chart which tells a different story. I don't like chart charts that look like they are languishing sideways. This one does. Analysis explained this drop away under the guise of "macro shift's" happening within the industry, not company specific reasons. With just one trading day left I would get out. Hanging in is to big a gamble. Wednesday's index loss was almost 500 points and today's action was an across the board market rebound. Get out and start tomorrow with a clear head. Read my previous blog on Pfizer options which also traded during the same time period.
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Harley-Davidson

First, I am not a big fan of playing options on stocks in the thirty and forty dollar range. It's not like speculating in Boeing or Caterpillar Calls and Puts with these stocks swinging up or down two or three dollars nearly everyday. Harley Davidson is a thirty five dollar stock. Look at how it is trading so poorly on the good earnings news back at the end of April.
Now here is some of this news.
All the good news was wiped out by the forecasting of a bit of a slowdown in the second half of this year. Investors who bought in early this year when the stock was trading over fifteen dollars higher who correctly anticipcated this surge of earnings must now feel so frustrated. Where are their rewards? Now look below and see where the January 37 Calls are trading at. If the stock gets above forty you would be in luck. That would buy you their next two earnings reports. By then management might see their business in a more favourable light. Yet the chart looks ugly and there doesn't seem to be a support level.* With most option positions "time value" works against you. When you purchase eight months of time and your reasonings for buying in turn out to be correct the time value can become your friend. It is however still a scary position to be considering.

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