Featured

Tesla And The Play Of The Week - An Easy Read.

Here is Telsa's five day chart. Can you see how it spiked to the upside on Friday morning before it tanked? Can you see how as the day progressed it dipped down to the support level of the $210.00 range? Here is its one day chart. Now this. Lucky in all this action are all those individuals who purchased one day Puts on Telsa in the first few minutes of trading. Look at how these Puts reacted. The lows of the day happened in the first few minutes of trading. Look at the pecentage gains. In the last example a $1.00 option went to $190.00 in one day. Catching one trade like this could make up for twenty bad trades. What's all this talk of Ai trading? Moves like this could blow up the exchanges if thousand of trading platforms could recognize this could happen. This was one of the best option trading opportunities of the decade.
Post a Comment

Eli Lilly Calls With Four Days to Go.

This is a four day trading week starting with Tuesday. Monday was a holiday. Here is how the stock Eli Lilly traded on the last five days and in the last three months.
The stock is surging upwards (thanks to a new weight loss product) and the following Calls and Puts are very expensive. Here are Fridays closing prices on the 780 series Calls and Puts. First the Calls.The Calls cost $14.35 and the Puts cost $11.70. They only buy you four days of trading time.
Now here is a chart showing how the stock closed out the day.
Finally, here is how the 780 Calls and Puts closed the day.
So the stock lost $24.60 on the day. Note the" Open- Interest" on the Calls and Puts stayed the same from the previous day. What happened was "covered-Call-selling" in the morning, meaning as the stock tumbled it was a no brainer to be selling the Calls if you already owned the underlying stock and then buying them back at a profit later in the day. There was also some just outright "Put-buying" activities triggered in part by how quickly things were crumbling down in the late morning, also with the intentions of getting out before the end of the day. That's why the numbers of open interest activities ended up matching perfectly from the previous day. Most of this would be "programmed-buying" triggered in part by a general sell off of the markets in their entirety. What proof do I have that this is what went down? Well look at this early morning action.
Well 139 Put options where opened by 9:41 a.m. followed by
a volume of 157 Puts at 9:47 a.m. What this means is that in the first 17 minutes of trading,traders were nibling gingerly at this action. After that another 1442 contracts traded on the day or 721 "in-and-out" Puts transactions. It took the first fifteen minutes of trading to prove that a general freefall in the markets was about to happen. Telsa was down $6.19 on the day, Caterpillar was down $8.17 and Snowflake down $10.23. It was just one of those days were the high flyers got picked on. The small "retail players" didn't catch any of this action because at the start of the day both the Puts and the Calls were simply to expensive to play. "Covered Call writing" is a strategy that the "little sharks" can't afford to do.

Comments

Post a Comment

Popular posts from this blog

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slighty out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-mas
Read more

The Crazy Last Day of Option Trading In Tesla.

Image
First, look at it's five day chart. Big jumps everyday. If you try and jump in and play the downside everyday you will quickly get beat up. Here for example is one look at the Tesla 235 Puts on Wednesday at 9:34 a.m., only then to check out the same Puts a few minutes later at 10:15 a.m. How do you know what to do? Well you don't fight stocks running up over $8.00 in the first thirteen minutes of trading. Now here is how these Puts were trading at 12:59 p.m. The game is to sell the Puts when the stock is rising and then cover them to be out of the markets at a profit by the end of the day. It's not the small fish playing this game. Now today is Thursday July 4th and the markets are closed. Tomorrow is Friday July 5th.These Put options will be expiring at tomorrow at 3:00 p.m. If Telsa opens down two or three dollars on the opening there is the potential for a small reaction. They will still however be extremely "out-of-the-money". They might jump a touch i
Read more

I Wonder How The Back Office Is Going To Handle My Complaint

Image
The blog is about dealing with the back office of the brokerage company I trade with. This story happened today. Todays trading session has closed and I just made a telephone call to them just after the market closed to voice a complaint over how I feel I got short changed. Here are my background notes. 1) It involves trading the 370 Boeing Puts that expire at the end of this week. I bought in at 10:08:34 a.m. and sold out at 2:59:38 p.m. I was stuck in this position longer than I had hoped. I got lucky and did O.K., however that is not the point. 2) Here are my two "in-and-out" tickets. Two contracts in at 10:08 a.m. at $163.00 each and two contracts out then "at-market" for $365.00 each at 2:59.38 p.m. Now here is Boeing's one day chart. It dropped precipitously from 2:59:00 p.m.to 3:00:p.m. I just happened to be watching it at the exact time of the crash. That's when news came out that the "FAA opens Now a Boeing Inquiry over 787 inspections"
Read more