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Part Two Of McDonald's Having An Upward Run

Nobody knows whats going to happen tomorrow. Let's jump forward. $1.64 or $164.00 dollars plus commissions will buy you one "310" series of Puts. In the first twelve minutes of trading only one contract traded. That just shows you how dangerous these option contracts can be. We are not talking about a one day move at this point in time. For option traders holding positions like this which were bought for quick flips an hour of watching the stock becomes a guessing game. Here it is now about seven minutes later. Note this, the pain continues? What's the DJIA doing? This becomes the path you are now on and it's to early to think about it becoming a dead end. If you still like the situation then yes you should buy more if you can afford to lose. Perhaps you made a big score on Disney Calls on the previous day. I talked about that. Now this at 11:09 a.m. Still the same number of contracts traded. Hold these thoughts. Part three of this blog will tell you wha...
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A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slightly 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 why not think about going short on Costco (buying Puts) to catch the January blues? Yet then again with interest rates potentially going down and fresh money coming into the market why are we thinking of Puts? Look at this article.
Look also at how this stock is opening as of late. Why try and fight a strong stock? I have never witnessed a five day trading pattern like this.
Let's look at a thirty day chart.
So the question now is are 30 day Puts better than 90 day Calls? Not really. In option trading it's best to sit on the sidelines when you think the markets are going in the wrong direction. This week the markets are in a holiday mode but next week could be a different story.**** A next week look at the same situation. Costco is down a chunk. The Puts were where the action was at.
When a strong stock dips it sometimes goes right back up again. Short term dips in this stock historically have not lasted very long. **** Now a January 5th 2024 update. First Disney. Here is a look at it's 2024 chart.
In our discussion of long term Call options yes the 95 series of Calls on Disney expiring in 2025 would have paid off nicely. What about Costco. How did it do in 2024? Here is it's one year chart.
It had clear sailing all year. Buying Calls on it last year when the stock was trading around $665.00 would have paid off big time. Long term options can sometimes be your best friend.

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