CAT Puts

And why option trading on Monday's with one week Calls sometimes work. Roku once again. It's rebounding off last's weeks earnings report. I talked about that in a previous blog. Look at this mornings happenings. Might it be time for a slight jump? Here are the 58 series of Calls in the late morning at 11:38 a.m. Why are these Calls interesting? There is wiggle room to go back up to where it was closer to the opening. What's next? This. Now the chart. Notice how little trading there was in these options after the 1:00 p.m. mark. On ten contracts this would be a tidy trade. **** Here is how they closed the day. **** Now a look at the furthering strength the following morning. ******* It's easy to be an arm chair follower of all this action. Notice this series of Call options stayed strong for the entire previous afternoon? That sometimes makes it a good bet that they will open stronger on the following opening. Yet not always.

Only to fall again. Look at this five and thirty day chart. ................................................... Yet thats only part of the story. Look at it's year to date chart. How bad was their earnings report? Do you think their pain and suffering is all now behind them? The stock is down 38% on the year. All I know is that they still seem to be making a pile of money. On a different note and in a different industry a stock named "First Solar" was stuck in neutral a few months back because interest rates where to seemingly high and companies in that industry were cutting back on the size and number of projects they were working on. Since that time and for whatever reason the stock in on fire. Both Boeing and Caterpillar also crashed last week on earning report releases. There seemed to be a hint of danger present in both companies releases. It's almost as if there was a domino effect. Next question? Why is Netflix gettng beat up? Look at it's chart. Is ...

Boeing rallied yesterday on the release of it's earnings report only then to tank. Caterpillar is tanking this morning in the premarkets. Let's begin with it's 5 day and 30 day chart. ... The world needs to be rebuilt and Caterpillar is there to help. It's growing, it's got a good reputation, it's not laying off employees and it's doing just fine. If it misses a beat on it's earnings report so what? Life goes on. Then there are those pesky analyst who are known to offer a convoluted spin on things. If you like Caterpillar just buy it on the dips and put it away. So the markets will be opening on the commentary by the companies C.E.O of "sales about flat". Phrasing it that way is a recipe for short term disaster. ..... The two printouts above show some of the early morning action in one Put series and in One Call series. What happened the next day? A slight rebound with next to no traders trying to capitalize on a rebound. What does this tell ...

Last week I got caught in the mud following Boeing all week. It basically went sideways and ended up being the 17th most activity traded stock on the NYSE "Most Active List" by dollar volume and up .27 cents on the week. The Dow rose only 3 points on the week. Here now is how the Boeing 170 Call options started this week, twenty minutes into the trading action. Here now on Wednesday April 24th is a look at it's most recent five day chart. So here is the thing. The 170 Calls closed Tuesday (yesterday) at $4.75 with the "open interest" numbers going up. Yes the stock has swings but who wants to shell out that much money for an "out-of-the-money" Call option with only three days trading life left in them? Compare this to my last blog on Lowe's where the chart screamed the stock was going up. I am including that chart again. Yesterday as shown in the chart the stock went up and the option series I illustrated doubled in one day. Now this. Why are th...

Lowe's. Look at this chart. Forget trying to understand if their business model is getting better. Four trading sessions to go and these units are "out-of-the-money" Calls. What's going to happen? Here is the Tuesday's action. Now here is what the chart looked like and what the markets did on the day. Do I like playing options on Lowes. Not really. Actually I very much dislike them. It's a difficult industry to understand with all to many variables coming into play. In this case it's chart made these options a compelling buy. Tomorrows story is anyones guess.

It happened on Friday. But first this news. Now here is Caterpillars one day trading chart for Friday April 19th. So the stock was up in the first hour of trading. It' a friday and anything could happen. Are buyers getting in to be part of the good news earning report? Does that set off alarm bells? A red light or a green light? Is it time for some counterintuitive thinking? Now look at this. A look at how the 357.50 Puts closed on the day. There are other series I could show however these particular ones best illustrate the point I want to make. Can you see the low of the day on these Puts? Can you see where it says $70.00 a contract? As the stock marched up smartly on the opening this series of Puts was under pressure. If Caterpillar kept going up these options would expire worthless. The exact time period I am talking about was somewhere around 10:15 a.m.. Fast forward the time period to around 12:50 p.m. Look at how the Puts jumped up to $5.00! That was the trade of the w...

Drug stocks are difficult to play. One year ago to this date Biogen was trading at $292.20. Today its at $193.61. That's down almost $100.00 on the year. Now look at it's three year chart. Back on May 11th 2022 the stock dipped down to $191.07. So the question now is will that now be a support level? That could be something to watch. How do you play options on a stock which has dropped for a year or more? You can't really. The system, for lack of better words has a built in defense mechanism. Let me try to explain it this way. Yes I think a rebound might be imminent for technical reasons however there are barriers to entry. Look for example at how expensive the one month out Calls are. A May Call contract (one month out) slightly above the current asking price is $8.00 a contract. When was the last time this stock ever went up $8.00 in one month? Well there was one $10.71 bounce between March 6th 2024 and March 12th 2024 so in theory anything could happen. Yet having sa...