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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 Again. Tesla's Call Are More Exciting To Watch But Deere Calls Are Also Somewhat Interesting

Seasoned option traders are a clever breed. Why? Well they know how to avoid traps meaning they know how to stay away from dangerous situations. Look at this current situation. Deere got clobbered today, Thursday October 3th. Down $7.80 on the day. Look at this.
What does this show? It shows the closing price of $3.30 that this series of slightly "in-the-money" Calls traded at, and it shows the number of contracts traded today on the day. Only eight. Once again, these are "in-the-money" Call options that expire tomorrow. Now this. A look at how these same Call options traded the next day, a Friday. Wouldn't you think that there might be some kind of a rebound after a stock dropped this much in one day?
The high on the day for these Calls was $3.50 a contract, an increase of only twenty cents from the previous day. My point once again is that option traders are a special breed who stayed away and resisted the impluse of trying to recapture some of the $7.80 that Deere lost on the previous day. Now a thirty day look at how Deere has traded. Up over $30.00 or one dollar a day!
Is Deere still in an uptrend? The drop of over $7.00 in one day on no news is a bit disconcerning. In previous blogs I have mentioned how playing 30 days Calls on Deere is the way to go. Now look at this "year-to-date" chart on Deere.
Are option traders who play Deere on a regular basis focused instead on purchasing next weeks Call options with the same striking price, or the Call options two weeks out? Here are the answers to those two questions.
Once again, few option traders find value with trading Deere options. Contrast this to the volume of trading on Friday on Tesla Calls about ten dollars "out-of-the-money".
They closed on Thursday at five dollars a contract and and hit an inner day high on Friday of two hundred and seven dollars a contract. Here is it's five day chart and look at the bounce it had on Friday morning.
Think of the stories that some traders would have on this kind of action. Who would have the guts to be holding one day Call options ten dollars "out-of-the-money" on Tesla on Thursday's closing market? Just by coincidence the caption on the front page of Barron's Oct. 7th states "Tesla's Turning Point". "Robotaxi Day" is happening later this week. Tesla options vs Deere options. You decide. Both are playable.

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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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