Featured

The Falling Off A Cliff Chart. I.B.M.

I.b.m. had a bad week. Here is how bad it was. Sometimes you see charts like this. It was down $74.89 on the week. What happened? The headlines said "I.B.M. just sent a warning to dividend investors". Something about it missing earnings forecasts because of an artificial-intelligence-related shift in it's customers spending. That is a new one that we don't hear very often. Which way is this stock going to now move? It's probably dumb to be chasing this when the outcome will most likely be all so random. Let's share the experience together. Here is what the Calls and Puts closest to what the stock is trading at are doing going into Monday morning's action. Don't gasp and say that the premiums exorbitant? They are not. Something is happening in our markets. I.B.M. got a real shakeout. Which way do you play it? Buying in on a Friday and cashing out on the following Monday morning opening would be one way however that opportunity is now missed. These opt...
Post a Comment

An Introduction Of Sort.

My name is Peter and about 45 years ago I did a short gig as a “Merrill Lynch” in Canada. I live in Ontario, Canada about a two hour drive away from Detroit. I like playing options and my focus is mainly on U.S. stocks. Prior to my gig at "Merrill" which lasted about two years I worked for another then well known Canadian brokerage firm that had a upscale office on the 55th floor of a downtown Toronto office building. They occupied the entire floor. In essence they were a "boiler room" operation (with a history dating back to the 1930's). Their focus on penny mining stocks and at that time they were a major player in that space. They have since closed down after a branch operation made some crazy trades that put them out of business. It soon became apparent that my style of trading not fit in well. I had one main client who was a mathematician I roomed with during university who gave me weekly lists of options to buy. Other rookies starting taking clues from me which somewhat exacerbated top managment. I was busy watching options on stocks like Exxon and IBM options. I didn't care about penny stocks. Then I transferred with the same organization to an office in another smaller city they operated where I discovered that the back office made a habit of skimming money off some of my more profitable trades. Stroke off one fill price and ink in another after consulting with the office manager who drank a lot. A fill of ten option contracts on Exxon at $3.50 would be reported back to me a $3.25. Not fun. A lady named Marilyn in the back office was doing this. I did end up confronting management about this with no avail. (They didn't do skimming back at the Toronto back office, it was a much more professional operation). Then I switched to Merrill and everything was there was above board. Switching companies was another story. I walked a block down the street a lunch time to a Merrill office where I had a friend working and was immediately interviewed by the office manager. He asked if he could call up my current manager to see how reliable I was as as an employee (that approach could have put me in a pickle). When he made the call my office manager who was also a broker with a book of business picked up the phone was drunk and was slurring his words. Bingo,thanks to his state of inebriation I was hired on the spot. Things were obviously different back then. I now work in an unrelated profession and oddly enough I still have the designation of being a Broker. I sell real estate. Time flies. I still have a passion for option trading. I like Fridays for trading "one-day" options. Five of my favourite stocks to now trade options on are Caterpillar, Ford, Exxon, Tesla and Boeing, not necessarily in that order. Caterpillar actually is my least favorite one of these five stocks to trade. Option trading on it is thin. Tesla is my "go-too" stock for option trading. I also speculate in options on stocks in the "five to ten" dollar price range. They can suprise. There are times when I will take a few days off from watching the market, knowing full well that I will be not be handicapped in playing options when I return to the action. In fact I return with fresh eyes. I read Barron's on the weekend. I tend to follow the most actively traded stocks. I need to be on a routine to play options and I don't trade with other people's money. Donald Trump is helping to make option trading easier. He says things which help make the markets move. Let me now share with you what I am watching in the option markets. Some blogs are better than others. With time some blogs get deleted with time. Tesla is the stock I have the most luck trading. I don't see that changing soon. Cheers.

Comments

Post a Comment

Popular posts from this blog

Waiting For A Drop On The Opening On Bad News - Eli Lilly

Image
Here is the bad news. The company is Eli Lilly. How bad is this news? Well look at it trading in the premarkets. So what do I think? I think the news is a setback of sorts, but not really all that bad. The stock is going to open lower, that's a given. It's like trying to play Boeing after an announcement that an airplane has crashed. So the stock is going to crash and it might have a small rebound and then it's going to slide down some more. A test of sorts will happen sometime in the afternoon. It might stock falling but then where will it go from there? The best case scenario is a recognition that investors got it all wrong and the stock ends up flat on the day. Yet there might be more of a downward dumping of the stock on the close followed by a selloff on tomorrows opening. Should option players be jumping in to play the upside on next week's Calls? That is the question. Here is a look at Boeing on the days after a crash. Day two after the crash was equally as ...
Read more

News on Polestar , Lucid (Trading After A Reverse Stock Split) Plus Ford News And Vinfast

Image
Look at the one year chart on Polester. Now it's one month chart. What's going on? It's confusing. It was down $.36 cents on the week. If you want you can spend $.20 or $.25 on Puts and hope that the company goes under in the next five or six months. They recently raised more money by releasing more shares so it's running out of options. You can't run at a loss forever and this news will most likely scare off potential new car buyers. This actually is a low number of outstanding Put options. The consensus seems to be that it is not game over yet. Lucid started trading this week on a "one-for-ten" reverse stock split. Here is its one week chart. It was down $1.39 on the week. It's also going to struggle. Both of these stocks have challenges ahead. On a more positive note here is a chart that looks kind of perky. Ford on the week. The stock was down $.03 cents on the week and it was the 3th highest in share volume trading on the NYSE. It appears...
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 slightly 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-ma...
Read more