Caterpillar Down $40.00 In One Day

Caterpillar was over $1,000 a share recently and now it's pulled back to $700.00 So it dropped this morning and rebounded a touch and then dropped again. After drops like this it usually goes sideways for a few days. Is buying tomorrow's "at-the-money" Calls a clever thing to do looking for a rebound? Not really. An "at-the-money" Call option will cost you like $1,000.00. That's pushing the envelope too far. The stock would have to go up $10.00 just to break even. Look at the low trading volume in the series of Calls shown below. What I do like is that the stock has had one quick uptick after it's massive morning sell off. Will bargain hunters return to the upside in the last hour of trading today? But here is the deal. I just did a blog about Walmart and the approach I talked about did have some merit. Please read it to see how clean a trade it was. This Caterpillar situation is tricky and will not sit well with many experienced option traders. I ...