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Costco Drops On A Friday Opening And McDonald's Goes Up

Here is what happened. Costco goes down on the opening. Charts like this is not pretty. McDonald's goes up. Confused? Why the interest in McDonald's? It's just junk food. If the market rolls over might this stock lose some of it's steam? Now look at these Puts? The volume of trading in them is next to nothing. Without knowing why it's going up makes the purchase of Puts too much of a gamble. Now lets look at these same Puts at 2:24 p.m. They got wiped out. What's Costco doing? Here is where things get interesting. The markets are still strong. Costco is down $74.24 around 2:23 p.m.! It's having a bad day but the stock now seems to be stabilizing. Now this. A look at it's Calls. Remember for retail option traders you're deadline to get out of these "last-day-to-expiring" options is 3:00 p.m. That's only 42 minutes away from the time of this printout.That doesn't give these options much life. Now consider this, after such a se...
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Staying With the 175 Calls on Boeing Of The Last Blog

One of the things I elluded to in my last blog is that weekends often act a reset buttons for the market. Sentiment can change. So Boeing jumped on Monday morning and the 175 Calls that expire this Friday went up. Here they are. They hit a high of $5.00. Sometimes it takes thirty or sixty minutes on Monday morning before this sentiment changes. That was the case this morning.
Then the market turned south and the DJIA closed dowm 649 points.
Let's now watch what this same series of the Puts did.
Can you see how options can be valuable trading vehicles in volatile markets? Caterpillar had the same story, a bounce on a Monday morning and an afternoon sell off. The Calls on Caterpillar that closed on Friday at $1.97 bounced as high as $8.40 on Monday morning.
Now look at what this same series of the Caterpillar Puts did on the afternoon.
What is there to learn from this? Well first don't be angry at yourself for not catching this action. Look at the low volume of Put options traded. Drops like this on a Monday muddy the waters for the rest of the week. The world needs to rethink the importance of option trading. Sometimes I feel that I am banging a drum that no one is listening to. All I really know is that Boeing and Caterpillar popped on the opening and then got slammed. A look at the same situation at 10:21 a.m. on the next day. First Boeing.
Now Caterpillar.
Can you see the power of options? Can you see the damage Trumph is causing messing with Tariffs? At some point in time traders will step in an attempt to stabilize the markets. Yet why not just stay away and look for happier days. Trying to outguess the markets is now at this time, a fools game.

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