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The Hint Of Inflation and Eli Lilly

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...
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Caterpillar and Boeing

Here are their five day charts. Caterpillar was down $41.61.
Boeing also got hit. It was down $36.72
It's Sunday night as I write this and the DJAI futures market at 10:44 p.m. is down 906 points. How can you use options to play this? Well Put options purchased two weeks ago would have worked wonderfully well. That was then and now is now. What to do. The markets look ugly for tomorrow. Just stay away. The hourly swings in the market can cost you money. Come back in a month's time. Nothing makes sense right now. Last Friday was a unique day. The markets were tanking and options on stocks were expiring the same day. Look at this chart of Eli Lilly last Friday at 10:42 a.m. The stock as down $60.20.
Now look at how these Call options closed the day.
With one day options the premiums for time value are very low. Buying any Call option tomorrow (Monday) will have an expiracy of April 11th (a Friday) meaning baked into the option's pricing will be a premium for time value. Thats not a good thing. But wait. At the start of last week I did a blog about Carvanna and it had Call options on them that sank on Monday morning and then came back up strongly in the first hour of trade. Could that happen again tomorrow? Not really. The weekend rallies against Trumph were to great. There will be nothing Trumph can say or do tomorrow to save the markets. Now is not the day to be trying to outguess the markets. That will change as the week progresses. For now just stay away.

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