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

Boeing In A State Of Equibrium On a Tuesday Morning For A Short Period Of Time

The markets are flat this morning, a Tuesday morning. Might things in the market start to change by Friday? Of coarse they will. Boeing as of late keeps trading down even though the demand for new planes outstripes the supply. Boeing keeps the world mobile and nothing is going to change that in the foreseeable future. It's stock should be going full speed ahead but its not.
Let's look at way "out-of-the-money" Calls on Boeing which expire this Friday.That's a stupid thing to be looking at because the probability of a payback is quite low. I have picked the 187.50 series of Calls which is like $4.00 or so "out-of-the money"and which expires this Friday.
Now here they are ten minutes later with volume increasing.
One hundred and eighteen were opened up in a ten minute period of time and the stock as the stock has sold off forty seven cents. Why am I trying to hone in on such a thin slice of market activity? Might it be best to take a position in something when the markets seem to be in a state of pause waiting for a directional move? Wouldn't it make more sense to look at option series closer to being in the money? Probably. Yet it's only Tuesday and a sharp uptick would do wonders for an option series like this. Now look at this.
Boeing now seems to be holding it's own in the first hour of trading and the Call options are relatively flat. Yet the options are best to consider when they are at the top or bottom of one of these breakout ranges. In this pattern there is no sense of urgency to get in.
Now an 11:00 a.m. update.
And now an 11:15 a.m. update.
Boeing seems to be holding it's own however with the five day chart moving down and the D.J.I. moving down its difficult to get excited about an upwards move.
Now the five day chart.
Now here is some option trickery coming into Boeing's option pricings. Boeing stock dives and the Call option premiums do reflect the true magnitude of this sell off.
What's this all about? What is happening now? Shouldn't the Call prices be going down quicker than they are. Bid $.36 ask $.53. That's a huge spread which suddenly puts traders at a huge disadvantage. Yet I can understand why. It is afterall a time period of intensive volatility and why should the system be set up to allow short term traders to make buckets of money everytime one of these irregularties arise? Now this.The stock is now at $178.06.
Finally there was some panic and an opportunity at the height of the panic. At some point in time the asking price must have dropped down to .17 cents! Look at how wide apart the bid and ask have suddenly become. This makes them difficult to try purchase at the price that you want to pay. Now here is how things were trading at 12:45 p.m.
....
So what ended up happening on the day?
As a reader do you feel exhausted reading all of this? What is there to learn? 1) A stock in a downward trend is exactly that. It should be respected. Looking for a reveral can be a fool's game. 2) Short term option trading can feel at times to be long term trading. In all fairness, I respect the trading patterns of the stock Boeing and the predictability of how the stock moves. Now a look at the 180 Puts on the day and look at the volumes of option trading.
That's where the action was. ** A next day April 10th update. Boeing is down again.

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