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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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First Solar

Remember in previous blogs I made mention of the EV industry experiencing a bit of a stumble over range anxiety issues. Then Tesla launched their new truck last week and reported they had a million orders for it. Suddenly the range anxiety issue seemed to disappear. Well the same thing was happening to the solar power industry. It was being reported for a few weeks or so that rising interest rates was keeping new customers from buying solar panels and companies from building out solar powered projects. First Solar sold off yesterday. Here is it's one month chart and a 2:32 p.m. look at the 155.00 and 152.50 Puts. The volume of trading on them was next to nothing.
Now the 155 and 152.50 Puts in the afternoon.

 Now here is the thing. When a stock starts to fall who knows when it will stop falling.  Other stocks like Netflix, Deere and Snowflake also trade like this. Big moves in short periods of time. Now look this chart. It's two days later.
Look where the stock is at now. It's below $145.00.  The 155 Puts are up 400%. Now for a one day chart to see where it closed today, December 7th
Would now be a good time to look for a reversal? Here is it's year-to-date chart.
This is a chart which could go both ways. It's 82 percent owned by institutions and can move on no apparent news, or news that retail players can't sniff out. Back in April it had a nice move.. All I am really trying to say is that option traders look for the breakouts on stocks like this. The light volume of option trading part of this story doesn't bother me. It's actually something I  appreciate. I don't like trading options on stocks like Apple where everyone and his brother is following the same action with a sense of confidence.. First Solar is known to surprise in both directions. * A Friday morning report.
A pop. Now here is the proof in the pudding. Look at the number of contracts traded in this series of Call options.  To be blunt, the someone wants to be in on this action. Who else trades options in blocks of 100?

Now look at it's chart a few weeks later.
* Let's now jump ahead to July 27th, 2024.
The one year out Calls is where the action turned out to be.

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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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