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A Random Walk In The Park On A Monday Morning. A Caution. Monday Mornings Are Often Not An Option Players Best Friend

Let's start with this. It's now 10:26 a.m. A bet on Caterpillar rebounding by the end of the week. There are no takers. Why have to watch the screen for the next four days in agony waiting for a rebound which if happens is just a "break even trade"? But Wait. I made a mistake. The market is actually now down 668 points. What else can we look at? Interactive Brokers. These kind of stocks always do poorly on days with the threat of margin calls. Yet there is something interesting about the printout I am about to show. It is that these options are "one-month-out" Calls. These longer term options trade differently than short term options. (these options trade in one month intervals). If the stock we are following stops it's freefall the value of the options will nudge up ten, fifteen or twenty percent. A seven dollar option Call might creep back up to $8.00 or $9.00 at which time it could be sold. In contrast with a five day option a slight reversal in ...
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Exxon And Tesla One Week Options

Exxon's five day chart is obviously going in one direction. Or is it?
Last Friday was a strong day for the markets and Exxon jumped up even more. Here we are now on a Monday morning and this week's Call and Put options are priced equally. Which one is going to win?
As usual, there is more interest in the Calls than in the Puts. Let's also look at what might happen with Tesla this week. Oct 10th is now touted as being a "make or break day" for Tesla as it will be their "Robo-Taxi-Day".
I am not a big fan of trying to play Tesla options with one week to go because their premiums are so expensive. As for Exxon, I would be more inclined to follow the direction of it's recent trend. Let's watch and see what happens. To be continued. 1) Obsevation #1 on a Monday morning. Look at this.
Early into the morning trading the Puts have dropped down from the $1.80 level. Can you see how tight the "bids" and "asks" are. This helps to make them pleasant to trade. Buy five or ten of them at one time and profit on any small move the stock makes. With Tesla option traders don't have this luxury. To much money needs to be put out (the contract sizes are larger) for short term trading oppportunities like this. Here is how the Puts closed the day.
A look at these same Puts on Tuesday morning.
Would it be time to get out? It would be tempting to sell. Forget the Calls. Playing them for a rebound is going to be to much of a struggle. Now look at this further dip.
This second screeen shoot was taken fourteen minutes later and can you see the $2.60 price hit $2.90? Here is how they closed out the day.
Now Wednesday morning. This is a good day of the week to catch a reveral.
Might now be time time to cosider a slight rebound?
Now Thursday evening.
Take your money and run. Why play one day Calls on Exxon if you have a profit? What happened to Tesla? It's Friday morning.
The 250 series of Puts that started the week at $10.12 on Friday's opening are now worth $31.94
Now here is how they closed the week.
Options on Telsa with five days to go are pretty scary animals. Exxon not so much so however this was a week for it of unusual volatilty. Next week's activity will be anticlimatical to all this action.

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