CAT Puts

Let's start with this. It's now 10:26 a.m. A bet on Caterpillar rebounding by the end of the week. There are no takers. Why have to watch the screen for the next four days in agony waiting for a rebound which if happens is just a "break even trade"? But Wait. I made a mistake. The market is actually now down 668 points. What else can we look at? Interactive Brokers. These kind of stocks always do poorly on days with the threat of margin calls. Yet there is something interesting about the printout I am about to show. It is that these options are "one-month-out" Calls. These longer term options trade differently than short term options. (these options trade in one month intervals). If the stock we are following stops it's freefall the value of the options will nudge up ten, fifteen or twenty percent. A seven dollar option Call might creep back up to $8.00 or $9.00 at which time it could be sold. In contrast with a five day option a slight reversal in ...

Doable means "within one's power". If you don't understand how to play Call and Put options yet, let me show you this. What is Walmart doing? It's selling food and soon may build new relationships with new suppliers. Change often comes at a price. Going forward will Walmart's profit margins get squeezed? That's the question. Look at Walmart's chart over the last year. Now let's look at Costco. What does that show us that is relavent to option trading? Well nothing really. It just tells us that these companies are not going to go away. Now if we look at their trading charts over the last five days will that information be more relevent? Maybe. I now offer you this material. A look at their five day charts. Now Costco. Does having access to these charts make you a better trader? Not really but stay with me. Now here is a tricky thought to digest. Everything you know about Walmart doesn't really have much revelancy when it comes to playing the...

It's Thursday morning and the markets are yet to open. Everything is soon to cost more but not yet. It's the "not-yet-markets' option traders find themselves trading in. Walmart is proudly advertising grapes are on sale. They want your business. We all have to go on living and we all have fears of getting hit by Donald Trump's hammer. Are car prices going to cost more? Who now has extra money to go to Disneyland? Should we be stocking up on plastic flower pots and party supplies from Dollarama? The markets sold off yesterday and tomorrow the markets will be closed for "Good Friday". In the futures market this morning at 8:17 a.m. the DJIA is down 588 points while the Nasdaq is up 172 points. Perhaps there will be a reprieve on the tech stocks today. The little fish like us trying to play options in this environment have lost our appetite to trade. Throw in $500.00 dollars and it's lost in a couple of days. Eli Lilly is expected to open like $80.00 hig...

When I sit with my friends on the weekend do I tell them about how Walmart call options traded on the previous day? If I am riding the subway do I talk to the guy next to me about this? Do I tell my boss? My point is, no one cares. People have soceer games to go, cars in getting fixed and all kinds of stresses to deal with. Who wants to watch their computer screens all day trying to outsmart the markets. I get it. Yet if you were good at it, wouldn't this be a fun hobby to have? Now this. A recap of what happened this past Friday. Now a look at one series of Call options with a focus on the high of the day and low on the day contract price. Look at the jump. Now a look at it's one day trading chart. The markets don't usually rally this much on a Friday afternoon. In a way it's a game of being in the right place at the right time. Yet there more to it than that. Knowing what to look for is equally as important. I note that seldom do one day Call options turn out th...

Tesla jumped up $50.00 in one day this week. On Thurday at the close here are the premiums on two series of Tesla Calls and two series of Puts that expire tomorrow (Friday) going into the mornings action. First a look at how the markets closed on Thursday. First the Calls. Tesla was down $19.80 on the previous day so a rebound of some sort might be expected. Now the Puts. I understand the high open interest numbers on the "out-of-the-money" Calls. They offer leverage if Tesla decides to bounce five or ten dollars on the opening. It often does. Eveen a five dollar bounce on the opening would move the needle upwards on these Calls. Now a look at it's five day chart. So what happened on Friday morning? By 9:53 a.m. the 252.50 Calls had jumped up to $8.05. They closed the previous trading session at $6.24. Not much of a gain but enough to illustrate thats what can sometimes happen with one day Calls on Tesla going into the opening. As we will eventually find out that p...