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Options on Five Dollar Stocks Can Surprise! HSAI

I have talked about this stock before (Hesai Group) and this morning it suprised again. Back on May 17th I did a blog on it called "A New Company To Learn About". Now lets look at it's current five day chart leading up to this morning. Look at yesterdays volume pour into it. Now this mornings early action. Another spike in volume on the opening. What's all the excitement about this morning? If you don't know this company here is what they do. Now back to my May 17th blog. Where were the five series of Calls on it trading back then which expire in January 2025? Here they are. No one had any interest in them. The bid and ask where crazy far apart. The option makers were burdened by making option markets for a stock with not much of an option trading history. The worry aferall is that a stock like this could double or tank overnight on news. Any stock could but more often it happens in this price range. Here they are now. So what happened today on November
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Tuesday and Wednesdays Looking For Reversals - That's What Some Option Traders Do

What if? But who has money to throw around like water? What if the markets decided to cool it? Wednesdays are usually better days for market reversals than Tuesdays. Caterpillar and Deere both had crazy high gains over the last five trading days. Deere is up after exposing the details of declining sales. Exposing is a strange wod to use but it better helps to explain the pain it is now facing. It is so confusing as to why it is up so much. Read my November 22nd, 2023 blog when Deere was pretty much in the same situation. So much forward looking thinking is baked into the the current prices of these two stocks. The question now is could the markets turn on a dime? Look at the Put prices on short term "out-of-the-money" Deere and Caterpillar positions.
Now Deere.
Both charts show a similiar trading pattern and both stocks have next to no outstanding open interest Put positions. Fighting strong charts is the kiss of death, Yet what happens if a mild selloff hits the markets in the next few days. Are these two stocks sitting ducks? Do you have any crazy money to play with? If you own Deere or Caterpillar stock would now be a good time to cash out and take a touch of your profits and consider Puts options? Admittedly this Fridays Puts are an extreme gamble. Going forward into December will traders be thinking of lightening up on positions with the transfer of leadership coming up after Christmas. Maybe. It's only a thought. (The markets will be closed Thursday Nov 28th for Thanksgiving. Trading volumes will be light on Friday). This factor might negate making a trade in this weeks Puts. Maybe next weeks Puts might be the ones to be looking at. Now this. Wedsnesday morning. Caterpillar and Deere continue to climb. Here are the Caterpillar Puts.
Now the Deere 455 Puts.
Sometimes reverals come into the market on Wednesday around noon. If we are still thinking about short term Puts on Caterpillar and Deere here are two now current readouts on the same two stocks but this time with adjusted striking prices. Both are "out-of-the-money" Puts option positions but the Deere Puts so much more "out-of-the-money".
Let's see what happens next. Now this, a Wednesday end of day readings.
Caterpillar Puts had a nice move and Deere continues to go up. Look at the bid and ask on Deere. A huge spread in the bid and ask. A huge spread just in case it drops five dollars on the next opening. Stranger things have happened. Now both their 5 days charts. What do you think is going to happen?
To be continued.

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