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Monday Morning April 7th

1) Had you bought Puts on the close on Friday on Tesla you would now be up 95% in nine minutes. 2) Had you bought Puts on Eli Lilly on Friday at the close you would now be up 162%. 3) Had you bought Puts on Home Depot on the close last Friday you would be up 85% 4) Had you bought Puts on Caterpillar on the close you would be up 100% 5) Had you bought Puts on Costco on the close, you would be uo 105%. Does it feel like you are always one step behind all the action? Can you now gamble on Eli Lilly to play the upside? If you read my last blog that was one of the few stocks that rebounded a touch interday on last Fridays slide. Maybe if you catch it right. Buy stocks if you like them at these prices but its not a good week to be dancing around trying to play Calls. The action in option trading for retail option players will intensify towards the end of the week when the time value built in premiums on short term options that expire in a day or two subsides. Those will be the days ...
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Five Day Swings. A Monday Morning Story About Option Playing

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So we all woke up Monday morning to yet another selloff. Investors are pissed. Margin calls are going out. If your trying to save for a downpayment for a new house and you have money in the markets it's a double whammy. Is there any relevancy in trying to outguess the markets at this point in time using options as a trading vehicle? Not really. When Russia invaded Ukraine the markets went array for months. We are witnessing the same thing happening now. It's nonsensical to be buying Puts on the closing on a Friday afternoon hoping for Trump to stir up the pot over the weekend yet that's what it seems take to create a winning trade. Everything is screwed up. Market volatility causes option premiums to be priced in a way to disuade traders from entering into postitions. Here is a case in point. Carvana dropped twenty dollars last week. Just below you can see it's chart. Having said all of this the remainer of this blog castes a shadow on everything I have just said. Pleas...
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The Power Of "Three-Day-Out" Puts On Four Stocks That In The Last Five Trading Sessions Have Outperformed The Markets

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If we look at the stock Carvana from a five or ten day persective that's not really enough time to get a full understanding of why the stock is trading the way it is. First a look at it's one month chart. Now a five day chart. On average it's up about five dollars a day. It kind of makes you wonder when you can start to play the downside. Now Netflix, a five day chart. It's the same thing, it's up over $75.00 in five trading sessions. We can't forget Tesla, it's up fifty dollars in five days. Boeing also got sucked into the upward draft as it had a few bits of good news like a government contract for new planes. This stock has also jumped in price. Had any option player tried to fight any of these stocks using Puts as a trading vehicle in the last five days they would have quite simply gotten smashed. Is there any reasons to now think its time to play the next three days of market trading looking for some downside action? Wednesdays are afterall days of...
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The Power Of "One-Month-Out-Options" For Short Term Gains.

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It helps when the markets rally on a Monday but that's a secondary issue. This blog is about stocks in the seventy dollar price range with options on them staggered in thirty day intervals. Is trading in options which trade in only in thirty day intervals better than options on stocks in the same price range that expire every Friday? My experience is that options on stocks that trade every thirty days tend to attract less interest which in turn means that they are less susceptible to "market-maker" manipulations. Yet this isn't really a point I want to debate. Now this, a look at the seventy series of Calls on "Carmax" at the end of the trading session today. Bid 5:70 ask 5:90. Only two options traded on the day. Let's now look at it's five day chart. So it jumped a touch but nothing to crazy. Now this, I did a blog last Friday, my previous blog where I showed what the same options were trading at on that day. Here is the printout I want to show. ...
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Charts Don't Usually Do This So Quickly. FedEx

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Look at this chart - it was early into a Friday morning. I am sorry I ignored it. It was Fed Ex and I was too busy to be watching it. My first thought when I saw the drop was that here is a perfect example of how a stock can drop and then be held perfectly still at a lower level. I often see this kind of a chart formation and know that it is often a precursor to further price declines. Yet I overlooked something. It's Fed Ex and this stock has a history of over amplify bad news and then somehow discounting that news. ...... The chart above shows its one year trading history. It's a power house business which has a history of getting knocked down. Now this. Can you see how some traders were not afraid to buy in on bad news? In this case there was time after it crashed to get in on the buy side. Now a look at next weeks Calls to see the slightly different trading action. NOW LOOK AT THIS. THIS IS SOMETHING SUPER IMPORTANT. Look at the open interest now in these next week ...
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Why You Can't Play Short Term Options On Carmax. Or Can You? This Blog Gets More Interesting Towards The End!

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So used car prices might start to cost more money if and when tariffs come into play. That's the latest thesis now under debate. Look at the huge declines in the stock prices of these three used auto selling companies in the last month or so. Totally shocking. Yet here is the funny thing. All three of these stocks have recently sold off. One reason for this is because car buyers can't afford the payments on the new cars they recently purchased at the low financing dealer rates. These vehicles are being dumped. If new cars are suddenly going to cost more because of tariffs then wouldn't these used car organizations fair better in selling the inventory they just bought at low prices? The cycles that the used car industry goes through are often frought with danger. Now this. A five day chart of "Carmax". Now this, a look at the one day Call options (that expire tomorrow) on "Carmax". What strikes you about them? What strikes me is that the volume of trad...
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