Featured

What Can Happen With One Day Options On A Friday when the "DJIA " Jumps 600 Points

When I sit with my friends on the weekend do I tell them about how Walmart call options traded on the previous day? If I am riding the subway do I talk to the guy next to me about this? Do I tell my boss? My point is, no one cares. People have soceer games to go, cars in getting fixed and all kinds of stresses to deal with. Who wants to watch their computer screens all day trying to outsmart the markets. I get it. Yet if you were good at it, wouldn't this be a fun hobby to have? Now this. A recap of what happened this past Friday. Now a look at one series of Call options with a focus on the high of the day and low on the day contract price. Look at the jump. Now a look at it's one day trading chart. The markets don't usually rally this much on a Friday afternoon. In a way it's a game of being in the right place at the right time. Yet there more to it than that. Knowing what to look for is equally as important. I note that seldom do one day Call options turn out th...
Post a Comment

Earning Season News.Two Powerful Earning Releases On The Same Day

Option traders wait for days like this. Earning reports can cause stocks to spike. Let's look at Boeing and General Dynamics Corp.. First Boeing. Here is it's news.
The company can't build planes fast enough. The stock surged on the opening only to have opportunistic traders take some of the wind out of their sails. There was a lot of details to absorb in a short period of time causing the stock to quiver. Sometimes Boeing can jump 15 dollars on good earning reports. Now look at this one day chart.
The lesson here is to take profits on the opening. Period. Things re not totally smooth sailing with Boeing. Taking profits and buying back in on the morning dip and selling out into the ensuing rally would really require luck. Next General Dynamics Corp.. Guess what? We are living in world of serious wars. Business has to be good for this company.
The details of how they are doing is not that important. Wars are good for General Dynamics and with the markets taking a grubbing as of late, good earning reports can cause a stock to shine. P.S. Stay away this quarter from playing the earning reports on stocks in the automotive industry. There is too much negativity in the air right now.

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