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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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Tesla Puts With One Day To Go - This Time After A Trading Session Where Tesla Was Up More Than $15.00 On The Day

So, here they are nine seconds into the Friday morning trading session. If you wait two minutes to get into the action the dynamics of the situation may look considerably different. At this particluar junction if you have the guts to get in it's best to do it "at market". The bid and ask are tight.
Now 1.5 hours later.
As a trader wouldn't it seem like a good time to get out? It is afterall a Friday and there is always be more opportunities next week? Now look at it's five day chart. Are you able to see the massive rally of about $15.00 on Thursday on the news of interest rate cuts? Call option traders trading Tesla would had a grin on their faces.
Do you think it will drop more? To better answer that question here is one indicator as to what the markets are doing.
Now let's skip ahead and see the final readings.
So a morning exiting was the correct call to make. At 11:00 a.m. these Puts were trading for $2.80 and another twenty minutes later they went as high as $4.41. Now a look at it's closing one day chart.
By noon the stock was back up to $240.00 making the options impossible to trade successfully for the rest of the afternoon. ** From past experience what I have learned is that you can only successfully trade Friday afternoon Calls on Tesla on strong days when the stock is up six or eight or ten dollars by noon. Those days sometimes happened quite frequently a few years back. Some trader's use Tesla as their "go-to" option trading vehicle because of it's known volatility. I will try and do a few more "Friday Tesla Morning Trading Blogs" going forward.

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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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