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Walmart Again

On Monday I did a blog on buying this week's Call options on Walmart. Today is now Thursday and there was a big crash in the markets yesterday. For example, Tesla had an insane selloff. Here is what happened to it. Today it is slightly rebounding as are so many other stocks. Thursdays however as oftened mentioned are not a good time to be purchasing one day options on stocks that expire the next day. So how is any of this revelant to Walmart's trading today? Well, there was a whole bunch other stocks that got knocked yesterday that might now rebound back up again together. Look at the chart below of Walmart and see how it was off a couple of dollars yesterday. Could you buy in now and get out later in the day? Fantasy thinking, one might say. Could it sneak up even one dollar? Now this. The stock mid morning is now merely trading sideways. Now look at this, the 93 series of Calls. (On Monday we were looking at the 94 series of Calls). At 10:22 a.m. the stock is up six cents...
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Biogen - A Tough Cookie to Play

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 said that, it's still a crazy price to pay and a risk much to high to take. Now let's look at these Call options that will expire in three days.
Note only 15 contracts traded on the day and an open interest of only 9 contracts. What's more, the spread between the bid and ask is high making it more difficult to trade. What this tells us is that traders don't see any value in trying to navigate in these waters during periods like this. It will be interesting to look back at this blog in one months time to see how this situation played itself out.* Here we are now in July, some three months out. So what happened?
The stock did find a support level. It's still ti difficult to play.

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