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Caterpillar - Catching A Reversal On A Monday

Mondays are not the best of days to look for reversals however Caterpillar jumped upwards a modest amount which impacted the value of this series of Puts. The Puts are off about 50% on the day at this point in time. This is a 1:36 p.m.readout. Here is it's five day chart. Now its one day chart. It's Puts. Why consider them? It would seem like kind of a random thing to do. Why fight a strong stock? One reason is that the markets are only mildly up and could give back some of it's gains before the end of the day. Caterpillar could be gaining strenght based on all of last weeks business articles talking about how Caterpillar could potentially benefit from all this new AI movement. Caterpillar afterall builds heavy equipment which can be used in the construction of nuclear reactors. Notice that the five day chart is in an uptrend and notice the small open interest numbers in the Puts. That's understandable. No one wants to hold Puts on Caterpillar when it is in this...
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Buying A Hot Potato - A One Day Look At Tesla Friday Options

First. Get into an option position just before the close of trading on a Thursday afternoon. This time the stock under consideration is Tesla. Will there be anything to learn from reading this? Probably not because the outcome of a situation like this will be different everytime. Find my last blog about how the Puts on Tesla traded last Friday. It was one of the most memorable trading experiences of the year. Let's quickly set the stage for today's action. First a look at one series of Telsa's Puts which expire tomorrow which will be Sept. 13th. Once again, this is a look at Thursday's full day of trading action in the 230 series of Puts. .
Now look at the Calls.
Now the five day chart.
Look at how the two open interest numbers are only like one-tenth of the daily number of options traded in each series. Traders don't want to be holding these positions overnight. Notice also how the open interest in the Puts is greater than in the Calls. What's that all about? One of the reasons might be that Put holders were amply rewarded on yesterdays opening. They now have profits to play with. See the above chart to verify that. Now lets check out out the action a few minutes after Fridays opening bell. Now a look at a two charts of the first five minutes of trading. This is interesting. First, the first five minutes of trading chart.
Now the five day chart.
Look at how quickly all of this action happened. Six minutes to be precise.
Puts that closed at $250.00 went as high as $453.00 on a suprise opening dip. What's going to happen next? There are endless variations of what might happen. If you look at the one day chart below you will also see that there was a second chance to buy back into the Calls around 10:30 a.m. and play them until 11:30 a.m. which becomes a game of "get-in-and-get-out". This is the type of action many daytraders are attracted to. The liquidity is excellent. Here are the end of the day results.
The stock really ended up doing nothing all day. Here is how the Calls and Puts closed on the day.
Our initial look at what the Calls were trading at were trading at (the 9:36 a.m. time period) was very close to the top of the range for that day. It was the same story for the Puts.
Once the glitter of the first five minutes of trading was over the rest of the days action in both the Calls and Puts was contained. Every Friday is different for Tesla options.

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