Featured

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 ...
Post a Comment

Boeing, Ford, Caterpillar and Tesla All Charged Upwards On The Week and Nio

Perhaps the best week of the year for Call option players with a short term perspective.
Tesla for example up like thirty dollars on the week. There were short term options on it that increased ten fold. The little exercise I wrote last week about buying Ford Calls at six cents each that ended up on the week selling for over one dollar each a contract actually happened. Is there a need to teach people how to play options? Yes and no. There is an expression 'knowledge is power'. There is the expression 'the rich get richer'. There is a proverb that says 'you can lead a horse to water but you can't make him drink'. But then again people have mortgages and bills to pay and money to play option with doesn't grow on trees. Who am I to tell people what to do? Spreads and straddles and doing iron condors. Sophisticated option traders describe the experience of playing options to being like driving an airplane and pulling levers at the appropriate times to help level out the ride. What do I enjoy the most about option trading? I like earning seasons and reading or hearing the comments made by company directors about future stock projectories. Harley-Davidson for example talking about more normalized markets for them ahead. I like listening to earning conference calls. I like focusing on the four stocks listed above because to me they are all "workhorse" stocks that have stories to tell. Somedays or weeks I like to walk away from the markets knowing that when I come back my absence away in a strange sort of way will actually help me focus on new opportunities with fresh eyes. That said, it's Monday morning and the markets are opening in two minutes. Have the markets run out of steam? Look at this action on the first fifteen minutes of trading. The auto stock Nio I talked about last week. First look at the one day spike it had last week. Does that suggest it could happen again?
Wasn't the stock ripe to have a repeat jump this morning?

Comments

Post a Comment

Popular posts from this blog

Living on Kraft Dinner?

Image
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 ...
Read more

The Little Engine That Could

Image
Walmart again. It's all I seem to blog about. Here is it's five day chart. The stock keeps going up and the option series are set up in one dollar spreads. Even a fifty cent move on the stock moves the needle on these Calls. Look at how this series of Calls was trading yesterday at 3:00 p.m.. Now here is this same series of Calls just before noon today. Thirty days of upward action like this punctuated by the off day of decline. Now notice the higher volume of trading in the series of Calls with the higher striking price. These are the ones's with more leverage. At the same time look at the five day chart on Costco. The two stocks sometimes trade in tandem. Humpty dumpty sat on a wall .... a had a great fall. Someday soon a fall might happen but what a great ride it has been.
Read more

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slighty out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-mas...
Read more