Some CNBC cronie reported OPTION BULLISHNESS " So far the biggest trade of the day has been the purchase of 19,500 BP July 45-strike calls for $0.71 each. Done with the stock at $44.22, this trade will profit if BP is above $45.71, or some 3 percent higher, by July expiration." Um, sure someone BOT but someone also SOLD! Buyers think UP and Sellers think NOT OVER STRIKE. To me that says FLOOR (or ceiling, depending on view)! Someone is creating a $45 TOP/STOP that BP won't trade above this level. TIME will shrink this option to July, so this is NOT Bullish! More Like Bearish! It's Bullish only when BP trades over the B/E point....which won't there, because someone is saying: by SELLING you these options I don't want the stock to go Past $45" Look at the Jan 14 $45 Calls=$1.55? WFT...So that means the Market doesn't think BP will get to $46.55 by Jan 2014 Expo? Really 8months to gain 5%? The stock pays a 5% Div, I think it can move up 5% in 8months! Market Scam! I am Long BP and have been years, and this proof of manipulation
Why not sell options on BP. I sell options quite often on different stocks. There is plenty of time for BP to go up and down, and buy back the options cheap as time degrades the value. You can always buy the stock again if it gets assigned. I sold options on YUM when it peaked recently and bought back cheap and made 450 to 550 a contract.
Oh, don't get me wrong I know....but to market or write about how it's BULLISH, is like wearing a condom and saying your PROLIFE (lot's of benefits with minimal risk) the reality is, it can be Bullish and it can be bearish/neutral..but many times you read about CALL OPTIONS it's always BULLISH. It's funny how the terms aren't what they really are. Sure selling calls is both; bearish don't exceed strike) and bullish buy the same investment for 25% the cost (with the potential to own the stock, which nobody ever does). Heck Selling Puts can be Bullish, I sell all kinds of Puts Hoping I get to BUY the underline stock? YET, it's a bearish trade. And, the market will say "OH There was a lot of PUT ACTION on ABC Today" i.e. BUYERS of puts to hedge a downturn! #$%$! If there's a Buyer, then there's a seller! It's no different then STOCK. CHE was dwon heavy today....for every share sold (Bear) there was a buyer (Bull), but because it was DOWN, it was SOLD OFF...#$%$!? How about ON SALE! I wish for once someone would market or put to media a better truth behind News, in stead of selling commercials or gaining clicks! Congrats on your YUM trades and good luck going forward! PS...Buy low & Sell calls and Puts! Also, Buy CVRR and get paid 14+% in Dividends!