CAT Puts

This is a unique opportunity to observe something which could shed some light on how smart Telsa option players really are. Telsa crashed on an earnings report release and short term option players were given a unique opportunity to speculate on a one day Friday rebound. Alternatively, a second option they were offered was to speculate on a further one day (Friday) decline caused by "late-to-the-party" investors wanting to get out of this news before things got even worse. YouTube videos scream a crash is coming in EV sales. It's one of those occassions where the earnings were actually pretty solid but where analyst set their expectations slightly higher. First a one day look at how Telsa traded on Jan 25th, 2024. It was down a chunk. When I say down a chunk it was down 12% in one day. Here are two short articles to better explain this action. So what is the "Let's See How Smart the Telsa Short Term Option Traders" is caption all about? Well it all has t...

" Not much has changed for the power grid over the past couple of decades. The U.S. consumed about 4.2 trillion kilowatt-hours of electricity in 2022, a record, but overall demand has been sluggish - just 0.4% growth annually since 2000. About 60% of that comes from burning coal and natural gas. Another 20% comes from nuclear power, with another 20% from renewable sources..... Right now EVs account for less than 1% of total electricity demand.... All told, electricity use could grow by 2% over the next decade.... Production will also be increasingly decentralized. Utilities will still generate the bulk of the electricity, but it will also come from a Walmart store with a solar roof, a Telsa owner with a backup battery, or a homeowner with a standby generator." Telsa had a bad week for trading. Here is it's five day chart. Telsa was down $18.60 on the week or 7.8%. It's getting to have a million pieces to the puzzle, with this week news of price drops in China and pro...

First the five day chart and a Thursday morning early trading chart. Timing is everything. Is a jump upwards by tomorrow possible or a slight rebound in the next few hours or into the early afternoon? It's really the next ninety minutes of trading which could be a sweet spot. To be continued. It's now just after 11:30 a.m. Can you see the bid and ask are up? Now Ford around 1:52 p.m. The market is softening up. Now would be a good time to get out and call it a day. In at .21 and out at .28. Do it on a trade size of 50, 75 or 100 contracts. It's not much of a gain however its a gain in U.S. money and it was a play on an oversold morning situation. A lagging stock in a strong market. There were small spikes around noon as news came out. We will check back later to see what happened to this series on the closing. Hanging onto these Calls going into the last day of trading is not a smart thing to do. Look at how wide the bid and ask are now at the closing. The market ...

It's the first trading session of the year and the x-mas chatter is that the world is still in a mess, consumers are overextended, rents might be softening and EV sales are hitting a rough patch. So what's the analyst jump start I am talking about? This isn't the first time it has jumped in a while. Look at this one day jump in mid December a few years ago. The stock also did jump from $15.92 on Sept 1st 2019 to $384.86 on Sept 1st 2021. Now look at the price of the 115 puts for this friday. The time of this reading was 1:48 p.m. after the morning jump was over. So this analyst is really reporting nothing new and simple playing the odds of getting recognized for an early year claim, knowing that the media is starving for news. Yet trying to play the downside on news that is not really news is a tough way to start the year. There are better things to be watching. (See my last's weeks blog on Costco falling). Now see how this series of Puts closed out the day. Let...