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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 ...

Lets Start With Caterpillar Calls On A Friday Afternoon at 12:08 p.m..

Now this. Call options which expire later in the day.
Now later. Well actually one hour and sixteen minutes later.
Now Telsa.
Now Telsa later.
Now Boeing with a first look starting at 1:22 p.m..
Now thirty minutes later. It's still stuck.
Now for a look at what the markets were doing when we first started this exercise.
Now a look at the markets at 2:00 p.m. about two hours later. It's turning out to be a strong day.
It's two p.m. Some options have doubled since lunch time. Time to exit. Things can get screwy towards the 3.00 pm. deadline for retail investors to get out of option positions. This is a Friday only rule on all options that expire that day. They want you out so that your positions do not gt exercised.Check back later over the weekend to see how these options ended up closing out. Friday Call option trading is not for the weak of heart but it can be a profitable adventure if there is strenght in the markets around lunch time. Now here are the three end of day readings. First Caterpillar. Notice that they hit a high of $2.60
Now Tesla. When we checked them at 2:47 p.m. they were trading near the top range of the day.
Finally Boeing.
A hour in the market holding a Call or Put position that expires that day can seem like an eternity.

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