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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 ...

Three Month Charts and Tesla

Is the world of option trading tidy, simple, predictable and coherent? No. Look at these three month charts. The first three are ugly followed by two that are not.
What's with Moderna? The U.S. government is talking to Moderna and Pfizer about a vaccine development program for bird flu. What's with First Solar? Rumors of solar power stocks being the beneficiary of A.I.. So the question now is how does one navigate in the world of option trading when the pace of change seems to be accelerating? It's difficult. Our minds can be blind to the obvious, and we are also blind to our blindness. In this current market state of rapid change one way of playing options might be to try and catch the daily price swings in Tesla. Here is it's most recent five day chart.
Catching a ten dollar bounce on a Tuesday with Call options on Tesla that expire on Friday or a five dollar bounce on Friday that expire that day can put a smile on your face. (Tesla is not always this jumpy).

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