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What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
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Deere On Earnings and Boeing

Here is a look at Deere towards the end of the afternoon after a premarket earnings report was released. It got beat up pretty bad. What we are now looking at is a printout of one Deere option series which will be expiring the next day. This snapshot was taken at 3:37 p.m.. Would now be a good time to buy into these 395 Calls and try to play tomorrow's potential upside? The stock is rebounding from a significant dip.
Lets look at how these options traded the next day. Can you see they hit a high of $4.65 sometime during the following day?
I did two very small trades on the Friday morning bounce back. I just wanted to cover my commissions and make a touch. Remember, Deere options are extremely difficult to play and with only hours to go before this series of Call options expire its not bad to take a profit whenever one materializes.
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My times in were 10:14 to 10:31 a.m. and 10:59 to 11.09 a.m. I missed the elusive high of $4.65 which happened after I got out. Part Two. Can you make money looking for bounces? Look a Boeing's five day trading chart last week and look at how it bounced on Thursday.
Guess what I picked up on Wednesday? "Out-of-money" Boeing Calls, 10 of the 190's, they were way "out-of-the money" Calls and 4, 185 Calls. I got lucky and got the bounce I needed on Thursday morning to make out alright. I did, however sell out to quickly - it's always difficult to guess the top, especially when holding "out-of-the-money" soon to expire positions.
Part two. Now let's move forward to looking at holding Boeing over the weekend. It sometimes pops on Monday mornings. I got in on Friday at 3:57 p.m. and out on Monday at 10:15 a.m. Getting out is always the tough part, trying to pick the correct exit point. This time I was off a bit. I got nervous on the fist dip and should have waited longer. In at $1.06 and out at $1.56.
Here is how the stock traded on Monday.
It dropped on a weak opening and then had some strong legs. It lost steam towards the end of the day. To be continued.

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What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
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