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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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A Santa Clause Rally in Boeing And Caterpillar And Others

It happened in the last thirty days.
Caterpillar was up $2.70 on the week and Boeing was up $10.83. These are both thirty day charts and as you can see both stocks have had huge runs.
So what next? Maybe it's time to splash some cold water on things. Here is a not so whimsical weekend report on Boeing.
Now look at how these three auto have done over the last run. Another Santa Clause rally.
All this keeps going. Look at Fedex, Costco and Home Depot over the last month.
So now what? Is the party soon coming to an end? Well here is the thing. These rallies are not exclusive to anyone stock. In a way that's kind of a bad thing. Each one of these individual stocks are up for non specific reasonings. Look at Walmart and it's one month chart. It's down when everything else seems to be up.
Why isn't Costco affected by this news?
The current news is that higher interest rates are here to stay. Strong jobs reports makes big rate cuts unlikely in 2024 and we are living in a more inflation prone world. Earning reports this year in general are healthy. But wait, things can change. We are bordering on a recession. I hate to ask this question but I am going to. If Walmart is down why is Costco up? It's a puzzle. (90% of the U.S. population lives within ten miles of a Walmart and the company has a broad customer base). Wouldn't they have their ears to the ground as to what is happenening? I am not a big fan of Costco Puts because the stock has a history of out outperforming the markets. At some point however on a strong uptick they might be something to consider. When it falls it can fall big/

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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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