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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 events like the release farm payroll numbers or other economic numbers 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 other stocks that got knocked do...
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Monday Morning Surges On The Opening.

I can't make this stuff up.
The open interest number was light. Not many people see value with holding Boeing Calls over the weekend. See it jump on the opening?
Caterpillar and Deere both did the same.
All of the "near-to-the-money" Call options on all three of these stocks doubled this morning. Yet you had to be in these option positions before the markets closed last Friday because of the "gap-to-the-upside" openings. This leads me to the following question. How comfortable are you in holding onto "one-week-out" Call options over the weekend? Why did all three of these stocks pop in tandem this morning, a Monday morning? One reason is that there is now a panic to be in the markets capitalize on this short term action. Call it a "Santa Clause" rally. That plus Bitcoin's recent sharp moves upwards screams to investors that maybe everything is priced to cheap. All that at a time when the CBOE volatitity index is rebounding off a two week decline. Boeing is hot with another rally on Tuesday morning.Look at these two charts.
Now what? The Puts? This kind of action is difficult to predict however at this moment in time there is a pause. Chasing the markets up and down on a minute to minute basis is not anyones ideal of a good time. Yet if your sitting on profits from the Boeing Call trade then it is something to consider.
One nice thing about option trading is that when you take breaks away from the action its all going to be there when you return. I will follow up with a look at how this situation unfolded. Now an end of Tuesday reading.
Now a closing reading on the Puts. Would you like to be in this situation right now? To be continued.

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