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Walmart Again

On Monday I did a blog on buying this week's Call options on Walmart for a morning move. Today is now Thursday and there was a big sell off in the markets yesterday. Tesla sold off for example and here is what happened to it. Today it is slightly rebounding as are so many other stocks. Thursdays however as oftened mentioned in recent blogs are not a good time to be purchasing one day options on stocks that expire the next day. Times change. In less chaotic times that's not always case. In the last few years there would be known upcoming Friday morning events like the release farm payroll numbers or other economic readings that would move the needle on the markets going up or down on on a Friday morning. In those markets it paid to get into option positions before the closing on a Thursday to get out on the Friday morning bounces were caused by the release of these premarket reports. So how is any of this revelant to Walmart's trading today? Well, there was a whole bunch o...
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In a Sea of Doom and Gloom Then There is Eli Lilly

First it's three month chart.
Now read this news.
So here now is a look at two series of Call options before the markets are to open after the release of this news. First the Call options that expire tomorrow at the striking price the stock is trading at. Note that on this day, yesterday there were no trades in this series of Calls.
Now a look at the 800 series of Calls which are some $23.00 "out-of-the-money". Once again these are options that expire in one day. Note once again a volume of trading of zero and 608 open contracts.
It would be fair to ask the question why are their no trades in either of these series of options? Well there is a risk in paying such exorbitant prices. In the case of buying the 772.50 Call series the stock would have to go up $27.00 in one dollar just to break even. In these dour markets speculators have other things to worry about which dampers their urges to take more risks. Look for example what just happened to Super Micro Computer. Here is it's thirty and five day charts.
Would you be looking at buying one day Calls on it (Call options that expire tomorrow). Here is how expensive they are going into Thursday's opening market with no trades in this series of options on the previous day.
Now this. Remember how this stock was trading around $900.00 thirty days ago? Does it only stand to reason that some option players were playing the 900 series of Calls only thirty days ago? Look at this. It might shock you. It shocks me.
What are we looking at? We are looking at over 4,000 open interest contracts. A staggering amount of money evaporated for owners holding these Calls. Now back to the Eli Lilly and it's one day Call options. Here is how the stock jumped.
Here is how the 772.50 series and 800 series of Calls traded.
Both had enormous jumps and the real action happened in the early minutes of trading. Few traders caught this upside action.This illustrates the power of Call options and how imprecise the exercise of trading them can sometimes be. That plus the importance how strong earning reports are on stocks that are beaten up. It also helped that the DJI jumped 683 points on the day. What then happened the following day, a Friday. People continued to want to be part of the action. The stock jumped another $40.00 days and the 800 series of Calls jumped again.
Now this. The same Calls again that were $16.45 a few days ago.
Eli Lilly suprised on an earnings report and even people late to the party were able to make money.

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