| | | In dealing with options on KMI for several years, the set up today is more than bullish.
At the time of this writing, KMI (trading at $19.60) has open interest in May options that add up to an open interest of puts above 19.00 = to 1459 + 244 =1703 {19.0s and 19.50s}. The number of similar priced call options is (13807 and 2487 = 16294).
If KMI closed out the day at the $19.60 price, the number of shares to be assigned via calls would be 16294 x's 100 = to 1,629,400. If it closes out below $19.00, the number of shares assigned via puts would be 170,300.
That is a huge amount of inventory the market maker has to cough up.
Normally Id expect a collapse in price on the last day before expiration.
Admittedly, a run up in price that has now gone for eleven days and today would be the 12th day straight, is now at the very overbot range with yesterday's RSI of 89.6588, with today's RSI lower a bit at 88.2393.
Today's price is now stretching the upper keltner channel upward.
Richard Kinder's opening comment about how "demand for natural gas will be the recipient of more growth" as data centers need more electricity to run the AI chips, has had a powerful impact on KMI's price.
KMI has gone from laggard to super star in the bull run of AI.
All with a great supportive comment regarding "KMI will be benefiting from AI computing which requires more electricity going into the future".
Normally I'd say watch out for post option expiration adjustment period on Monday and Tuesday.
If that does not happen, then the market maker had been doing his Delta Hedging very well.
We'll see soon enough.
I hope this is an continuation pattern that will lead us into the 20's for good!
I'm pleasantly surprised and holding on tight as KMI looks to be entering a much more volatile trading period.
Since it is my largest holding in number of shares held, I'm talking my book when I say "GIDDY UP KMI!"
Hold with confidence and buy on the DIP , if it happens - I suspect it will.
Bob |
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