Featured

Another Blog On "Vinfast"

There is so much to read about this companies history online. Do your own homework. Their success is not dependent on what ends up happening with their sales in North America. They are nimble. There are plenty of auto factories all over the world now for sale they can acquire. They have dabbled in Australia. Having access to money to keep going doesn't seem to be their problem. Rivian also seems to enjoy this advantage. Vinfast is currently building a new plant in India which could employ thousands of people. That's an emerging new market. New relationships are being built and new investors will be coming onboard. Are option players looking at this stock? Not really if we look at these "one-month-out" Calls. What about Calls further out? What about next January? Here is a look at the three and four series of Calls. Nobody seems willing to bet Vinfast Calls. Now this. Here are two snippets taken from a blog I wrote about this stock back in early December of 2024. ...
Post a Comment

Five Day Swings. A Monday Morning Story About Option Playing

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. Please read about what happened this morning.
The markets dropped on the opening this morning and Carvana also dropped and then quickly regained what it lost. You can see that drop at the tail end of the five day chart shown above as it includes the first thirty minutes of the monday morning trading. It was in that moment of fear that some option traders took advantage of by opening up new positions. You can see one series of Calls I posted just below on Carvana trade down to the $5.75 price point. An hour later these same traders could be out at a profit. In a way that goes against everything I just said about being able to successfully trade in these markets. Now here is it's thirty day chart. Used car prices might start to go up.
Now here is a look at these same Calls that traded down to $5.75 two hours into the morning's trading action. They have doubled.
Now for a comment that is somewhat unusual. Yes you can sit around all weekend and look at charts and speculate as to what might happen in the coming days. Yet that is something many successful option traders don't have to do. It's about catching short term market swings and it's usually easier to justify purchasing Calls than Puts like in what happened this morning. A fear factor plagued the markets this morning after the entire world watched in disbelief Trump doing an interview on an airplane over the weekend telling reporters he doesn't really know what the term stagflation means and telling eveyone he wants to target a whole bunch of additional countries with tariffs. The futures markets panicked after witnessing that interview. Is this goon out to destroy his country? Why is he now talking about his abilities to win yet another future election based on the great work he is now doing? I can see why the markets opened in a state of panic. Reacting to panic. That's the new game option traders are adapting to. *** Here is how the same Carvana Calls closed the day.

Comments

Post a Comment

Popular posts from this blog

Living on Kraft Dinner?

Image
What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
Read more

The Little Engine That Could

Image
Walmart again. It's all I seem to blog about. Here is it's five day chart. The stock keeps going up and the option series are set up in one dollar spreads. Even a fifty cent move on the stock moves the needle on these Calls. Look at how this series of Calls was trading yesterday at 3:00 p.m.. Now here is this same series of Calls just before noon today. Thirty days of upward action like this punctuated by the off day of decline. Now notice the higher volume of trading in the series of Calls with the higher striking price. These are the ones's with more leverage. At the same time look at the five day chart on Costco. The two stocks sometimes trade in tandem. Humpty dumpty sat on a wall .... a had a great fall. Someday soon a fall might happen but what a great ride it has been.
Read more

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slighty out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-mas...
Read more