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The Markets Never Stop. The Stock Lowes And Forward Looking Thinking.

An earning's report came out and some of the reason's the stock dropped made sense. Let me tell you what happened and why. Lowe's sold off in price over $12.00 in one day on an earnings report. How bad was the report? Well that is something that is debatable. Some people would say that past sales are not a good indication as to what might happen next. Not many option traders attempted to trade in it. Some traders derive more pleasure in playing the rebounds after these types of announcements come out. Here is what their C.E.O said. It is her job to try to put was a positive spin on things. Every word she uttered was well rehearsed. Lowes and Home Depot are always difficult to play because their stories can be spun in so many different ways. On a different note, the Put options five dollars "out-of-the-money", which were the 265 series of Puts were a cheaper and a more profitable way to play this action than the 270 Puts. Yet then again, if the stock only dro
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"One-Day" Puts That Crazy People Can Play - Netflix

Read the previous blog first, about Exxon on Friday. The Puts on it's last day before they expire options increased in price in the last few hours of trading. So to did the Puts on Nexflix on that same afternoon. Can you see how it sold off six dollars in the morning trading session (the first chart below) only to rebound almost three dollars? Then the stock got tested again and this time it lost it's steam.
Then what happened? Well here are the 470 Puts at 12:08 p.m. which expire at 3:00 p.m. The stock looks like it is trading in a channel downwards. See the chart below.
What next?
Yes the stock continued to drop approaching the 3:00 p.m. deadline/ expiracy time date. Now look at the same series of Puts at 2:12 p.m. They were trading at $490.00.
Looks so easy right? Let's check out it's five day chart and it's year-to-date chart.
Yes on Friday it looked like it wanted to roll over. * Two things. The reality of trading short options like this. Lock yourself in a room and run a bunch of moniters. Lots of cool stuff can happen on a Friday afternoon. If you going to play in this market focus on stocks in this price range. You need a stock that can swing three or four dollars in one day. Lower priced stocks do not. Big swings at this time of the day - like plus or minus $1.00 swings in fifteen minutes often happen. At some point in time take your profits and turn off your computer. There will always be another trading day. ** On the following day Netflix was down after $12.00 mid afternoon. What a drop.
Keep all of this in mind the next time you are thinking of the stock. It can move quickly.

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