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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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Boeing - Towards Understanding How One Must Learn To Pick Your Battles.

A multitude of factors have kept Boeing down since my last blog about it in April. What happened this morning was a touch unusual. First the five-day and one-day chart.
Now this. Can you see the morning jump at 11:00 a.m.?
The top reason for looking for opportunities like this is that the weekends often wash away negative sentiments if only for a brief period. These are "out-of-the-money" Calls with 4.5 days of trading life in them. If they had only one or two days of trading life in them then the risk of trading them would be too great. Note how the volume of contracts traded greatly exceeded the open interest. Traders got in and out. Traders recognized a break-out pattern. What's going to happen next is anyone's guess. This is short-term options trading. Stocks in the 200.00 dollar price range offer more opportunities like this than stocks trading under $100.00. That's just the way it is. Let's now look at this morning's action in Fisker. It's a totally different option trading experience.
What happened to cause this jump?
Yes, their Call options popped. Two different types of trades, two different situations. How would anyone have any advance notice the Fisker news was about to happen? Would you want to be sitting in Fisker Calls when the stock has been disappointing for such a long time? Not really. In option trading, you have to learn how to pick your battles.

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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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