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A Random Walk In The Park On A Monday Morning. A Caution. Monday Mornings Are Often Not An Option Players Best Friend

Let's start with this. It's now 10:26 a.m. A bet on Caterpillar rebounding by the end of the week. There are no takers. Why have to watch the screen for the next four days in agony waiting for a rebound which if happens is just a "break even trade"? But Wait. I made a mistake. The market is actually now down 668 points. What else can we look at? Interactive Brokers. These kind of stocks always do poorly on days with the threat of margin calls. Yet there is something interesting about the printout I am about to show. It is that these options are "one-month-out" Calls. These longer term options trade differently than short term options. (these options trade in one month intervals). If the stock we are following stops it's freefall the value of the options will nudge up ten, fifteen or twenty percent. A seven dollar option Call might creep back up to $8.00 or $9.00 at which time it could be sold. In contrast with a five day option a slight reversal in ...
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Ford. Pick Your Battle

It's down on a Wednesday and here is some recently released news.
Now here is it's five day chart.
So it's around the 2:45p.m. on Wednesday and not much is happening with the stock. Recently the option chain link was changed. Say goodbye to the 12 series of options, the 12.5 series of Calls and the likes of numbers like that. Now they are the 11.82 series, the 12.32 series ,the 12.82 series.... Why the change? It could be said that stocks are more likely to close closer to numbers like 12.00 or 12.50 so that could be part of the reason why. So hear is a printout of where the 11.82 and 12.32 series of Calls are now trading.
What are two reasons why I like these Calls? The first is that they could rebound on the closing today or on the opening tomorrow without the time value left in them becoming a big issue. The second reason is that there are more outstanding open Calls on the slightly higher and now "out-of-the money" Calls. To be more exact there are 2,646 contracts open on the 11.82 series and 17,507 contracts open on the 12.32 series. What different does that make you might ask? It will be in the best interest of the option makers to try and close the stock on Friday below the 12.32 price point. That will burn more option holders. Disney is also a stock now in this situation. Last week it popped up to over $110.00 a share, for the first time in a long time and now it has retreated about $2.00 per share in the last few days leaving a large number of Call holders holding the bag on $110.00 Calls. That was the series most actively traded last week. The overhanging number of open Call option positions may be something to consider the next time you are looking at Call options like this with only two days to go. Now here how it closed the day.
To be continued. But wait. Everything looked great in the premarkets.
Then the opening. Yes you could have picked a price and tried to get a fill. Then the opening. Ford dropped, meaning the pain and suffering of waiting for a rebound.
Now this,thirteen minutes later.
Now it's 9:54 a.m. and here is what the chart now looks like. That's the kind of strenght you should be selling into.
.....
They hit a high of .43 dollars and here is how they closed the day.
If you are in Canada and you have to pay crazy high commissions on these low priced contracts you have to buy like 50 or 100 contracts to make any money. The end.

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