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A Random Walk In The Park On A Monday Morning. A Caution. Monday Mornings Are Often Not An Option Players Best Friend

Let's start with this. It's now 10:26 a.m. A bet on Caterpillar rebounding by the end of the week. There are no takers. Why have to watch the screen for the next four days in agony waiting for a rebound which if happens is just a "break even trade"? But Wait. I made a mistake. The market is actually now down 668 points. What else can we look at? Interactive Brokers. These kind of stocks always do poorly on days with the threat of margin calls. Yet there is something interesting about the printout I am about to show. It is that these options are "one-month-out" Calls. These longer term options trade differently than short term options. (these options trade in one month intervals). If the stock we are following stops it's freefall the value of the options will nudge up ten, fifteen or twenty percent. A seven dollar option Call might creep back up to $8.00 or $9.00 at which time it could be sold. In contrast with a five day option a slight reversal in ...
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Rivian

What does it mean when someone dumps 875,000 shares of Rivian at 3:59:59 p.m. at $13:45? That's a twelve million dollar ticket.That happened yesterday after the stock sputtered around all day on low volumes of trading. (It usually trades about 26 million shares a day so the 875,000 share ticket may not be all that unusual).
That was calculated timing, perhaps computer programmed selling. Would that send off shock waves on it's following mornings trading. Not really.
Look at what happened in the first minute of the opening trading the next day. A block of 275,017 shares traded at 9:30:59 a.m. at $13:71. What does this point out? First, it might point out how computerized trading triggers trades to happen in the last second of the first minute of trading in any new session. How you can profit from that observation is something you will have to figure out on your own. It also points out how infinitesimally inconsequential all of the retail option trading is. Your purchase of five Calls on Boeing that expire this Friday is as significant as a fly landing on the back of a horse. It also points out the efficiencies of the markets. So the next question is how can the little guys make money playing options when the system with it's computerized buy and sell programs is as tight as it is? In some ways retail option traders should find some assurances in the markets having this much depth. For example, from my experience the market makers can not mess around with buy and sell orders going in "at market" at 3:59:57 or 3:59:58 p.m. That's a good thing. Happy trading.

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