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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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Disney - Part Two And Three- "A Double" or More On The Openings

It's best to read my last blog first. Disney might be popping.
Here is todays full day of trading. It's a Monday. Does that look like a big pop to you? Not really, but now look at what it's five-day chart looks like and that will help make it a different story. Call options on it, the 110 Calls to be more precise, that expire this Friday doubled early in the morning from their previous close on Friday at 4:00 p.m.. I explained this in my last blog but I will show it to you again. Can you see on the chart above how it moved smartly up in the first hour or so of trading?
Here is how they traded on Monday Feb. 12th. They popped on the opening and then cooled down towards the end of the trading session.
What happened today which is so much different than what I saw happening all of last week? Well, the open interest at the end of today's trading in this series of Calls was considerably higher than the open interest at the end of each day's trading activity last week of all of the other stocks I was following. In this case it could be because the traders getting out on this morning's uptick with a well deseved profit (it takes guts to be holding Calls over the weekend) were then buying back into this same series of Calls again, perhaps even in larger contract numbers towards the end of the day. If so,that's not a positive thing to be happening. It could hinder the stock from jumping up tomorrow. Now look at a current chart of another company in an unrelated industry.
It's also a current five day chart. My point is that sometimes a stock that goes sideways for a long time can suddenly suprise. Disney may now be in that camp. *** Now Tuesday's action. It was a rough day for the markets.
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........ Some traders were getting out as the stock held firm on a day the D.J.I. was off 525 points. Now Thursday. We are getting down to the wire as to when these options expire so the interest in this series is dying out or option traders are moving forward to next weeks options with the same or slightly higher striking price. Notice the open interest has dropped considerable. With one day to go the risk of holding onto an overnight position is just not worth it. Here is what happened today.
Here is how they closed the week.
Now the Calls.
They were a great series to be trading all week. *** Bad news one week later. The party is over. Last week's repeated great trading opportunities are over.

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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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