CAT Puts

Yesterday holding Calls on this stock was a walk in the part. See yesterday's chart. Today is a different story. A potential lawsuit is brewing. It is claimed that management provided false guidance. I don't think that this case is going to gain much traction. Managment said. So the Calls we were looking at yesterday took a hit and here is how it's afternoon chart is trading. Rather than looking at the 47.50 Calls we were looking at yesterday we should now be looking at the 45 series of Calls. That's the luxury short term daytraders have. Now the 45 series of Calls options that offer leverage on one dollars moves and not the 47.50 series. Here are two different series to look at, one series that expires this Friday and one series that expires a week Friday. But here now is the problem. The happy, zippy little chart pattern we saw in the last three of four days is now broken. Yet another problem is that I don't like trading stocks in this price range. I like bet...

Sometimes you see charts like this and instantaneously one's brain says "I don't like it" . I get it. Let's check back later in eighteen minutes to see how many new contracts are added to the count. The stock has dropped another 48 cents. It's trying to predict the bottom of the fall which becomes the million dollar question. 503 new contracts are added. Now this. Perhaps it was a computer generated program that that purchased a block of 500 Calls. Is that a good thing or a bad thing? Well it might help us in deciding when to jump onboard. Now this at 10:51 a.m. Tuesday in the new world of playing one week options are a good day to pull off stunts like this. ** Here is how Exxon closed the day. The falling drop syndrome sometimes works on Exxon but not so much with other stocks.

I have talked about Carmax before. The stock got hit hard on a recent earnings report. Now it's five and thirty day charts. The stock seems range bound. I like stocks that go sideways after a slight bounce. Now look at this, a look at how other companies in the same space are trading on the day. They are all down except Carmax. On a good day when everything is up these Calls could move upwards by 50%. (Don't take my advise ..... learn to look for opportunities like this on your own ....). Here they are at 3:56 p.m. On ten contracts the move on these Calls would have resulted in a profitable afternoon day trade. Here is how the stock traded on the day. What a smooth afternoon Monday ride.

So here is the first trade on a Caterpillar Put this morning. Someone jumped in as Caterpillar was shooting up. Then this happened. Caterpillar jumped some more and a block of ten Puts sold and then another one. Then this happened. The poor fellow who got in at $6.00 paid to much. Then this happened. Big volume surged in and these options went up. It all happened in 35 minutes. That's what Monday morning trading can sometimes be about. This blog ties into the story of my last blog. The danger now at this point is that Caterpillar could tick back up. Look at it's five day chart. I wonder if the above traders are taking their profits. Here for interest sake is how these Caterpillar Puts closed the day. Now at Tuesday look. Notice the open interst number jumped up yesterday. Maybe it was done with one ticket for 500 contracts. Mayne someone realized that last's weeks jump was to much.

Not a bad week. Here is how it traded on Friday. It was up $7.28 however it was losing steam towards the end of the trading session. Here is how one of it's Call option series traded on Friday. A couple of comments. Look at the low interest in the outstanding number of option contracts in this one series shown. Option traders don't like trading them. Their earning report for the quarter doesn't come put until Oct 29th. Earnings per share this year are expected to be around $18.00 per share compared to $21.00 in 2023. Caterpillar is helped by interest rates coming down and the increased interest in mining actitives and AI biulding infrastructure projects.How true any of this? One can only guess. The stock Deere and Co. in contrast was down $1.11 on the week. Farmers are in trouble. Now let's look at Caterpillars 30 day chart. Now a look at these three series of "out-of-the-money" Puts that will expire at the end of this week. No one is wanting to trade th...