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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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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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