Pre Market NOV 13, 2024

Stocks are slightly “reddish” here in the Pre Market today
Crypto to include MARA is taking a big hit this morning. That is partly why we play with Verticals, for downside protection

Trader Tip:
Pro Tip:
Call it what you want but this is something that all traders, DOUBLE / TRIPLE / QUADRUPLE especially Options traders NEED TO KNOW

And if someone that has never traded Options tries to tell you yeah it’s just like stocks, run, they are uneducated, run, it’s not the same, not even close

It’s the Bid / Ask
In Options it can make you money or leave you busted, immediately, from the very moment that you click the button.. Even if the underlying rises in price. Ever heard of a stock investor that bought at 100 then sold at 120 and lost money? Me neither… Options traders can.

Last night I was scanning for new Options plays. It starts with stock charts, found a few great looking charts. 2 really made me go wow, box on boxes just like we like here at theoptionscoach.net.
Went and did a deeper look, 3 year chart, 5 year chart, then calculated the DTC from the short interest. It was a 7.2………Anything above 5 is good, it means a short squeeze could occur….
Went to the Options Chain… O.I. was strong… Deltas were generous and the I.V. was like a freebie….. Looking good!!!!!!
Go through the rest of our 17 point checklist, get over to the Bid / Ask and ummmmmmm what????? The spread is 0.05 - 2.50

Anytime a Bid / Ask spread is so wide that you can drive a truck through it you can usually get in pretty cheap, getting out with out taking a loss, even if the stock is green, is not always possible

Stocks went Vertical last week, the big questions is will J-Pow and the FED try to kill it here? He loves killing markets when they are up
Also when we have huge runups like we just had the Bid / Ask spread sometimes comes more into play. I always mention the MID when discussing Options plays. Those MID’s come from pretty tight Bid / Asks……. We don’t take them lightly

S+P Support is 5,950
Time to grind

The Options Coach