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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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Can You Buy Boeing Calls For a Morning Turnaround?

Here what the DJI is doing at 10:00 a.m. It's up a touch on the opening. Yet Boeing is down. What's that all about?.
Here is what Boeing is doing. Would you jump into Calls now to try and play the upside?
Here now is the cost of an $187.50 Call that expires on Friday. It's Wednesday and the week is only half over. What might the short term options that expire on Boeing on Friday do? The minute to minute chart looks like the stock might be turning upwards.
Boeing can sometimes jump five dollars in one day, not usually however on days when it moves down three dollars in the first half hour of trading so this isn't the brightest of trades to be making. It's a trade looking for a slight rebound, maybe to get into and out of by lunchtime. So what to do? Let's do the smallest of trades. Let's just purchase just one slightly "out-of-the-money" Call option as an experiment. Here is what that would look like. One Call option purchase at 9:37 a.m. for $100.00. I am not trying to encourage novice investors to trade like this however I am trying to point out the opportunties that are available. Let's see what happens. Here now is a printout of the one option I purchased and the chart of how the stock traded on the day.
So things chugged along nicely up until noon and add upwards again until about 2:00 or 3:00 p.m. Look at where I got out. If you look at the chart you will see that I was lucky to get out when I did. I got out at 2:59 p.m. at $1.62 .
So how relevant is this blog? That is something I can't answer. Look at what happened today Thursday May 23th to Boeing, the day after reporting this Boeing trade. The D.J.I dropped over 600 points.
When things like this happen it makes you rethink the entire process of wanting to speculate in options. It puts into perspective the importance of watching the markets on a "hour-to-hour" basis to better understand which way the markets are going. If you are watching the trading activities of six car companies on one screen or six medical companies or whatever it is you happen to be following you must be on top of these minute to minute trends to help validate your intuitive judgement. The scary part is what happens when you then read one of these Dow Jones flash news reports. Reports like this often make you realize how little you actually know about what companies like Boeing, Telsa, Ford, Caterpillar, Moderna and Caterpillar are up to. Yes, you can play Boeing to go up after it drops three dollars on the opening. It is said that our minds can be blind to the obvious, and we are also blind to our blindness.

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