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Caterpillar - Catching A Reversal On A Tuesday

Tuesdays are not the best of days to look for reversals however Caterpillar jumped a modest amount which impacted the value of this series of Puts. This is a 1:36 p.m. readout. Here is it's five day chart. Now its one day chart. It would seem like kind of a random thing to do and why fight a strong stock? One reason is that the markets are only mildly up and could give back some of it's gains before the end of the day. Caterpillar could be gaining strenght based on last weeks articles talking about how Caterpillar could potential gain from this new AI movement. Notice that the five day chart is in an uptrend and notice the small open interest numbers in the Puts. No one wants to hold Puts on Caterpillar when it is in this uptrend. Could it has a soft selloff in the next two hours? Here it is now 50 minutes later. The "bid and ask" are almost unchanged. There is also not much change in the DJIA index.Now this. The DJIA is sellig off and Caterpillar is hanging ...
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Chargepoint Holdings And An Earnings Report. Do You Watch This Sector Of The Market?

Chargepoint has not traded over $2.00 a share in the last ninety days.
So why then was there so much trading today, a Tuesday in the "two series" of Call options on it which expire this Friday? Well an earnings report comes out tomorrow and these traders are hoping for a pop. Action in the $1.50 series" of Call options on it which expire this Friday were much more mutted but also offer potential to move upwards.
Are they expecting a pop that will raise the stock to over the $2.00 level? That is not necessarily needed. Even a more modest pop of twenty cents on good news would be enough to move the needle on these five cent or five dollar per contract options to then create a profitable exit point. The added security, albeit not much support in doing this trade is that there are two more trading days after Wednesday to potentially help it move higher in price. A pop to what level? Perhaps a pop to eight cents? Does that sound crazy? Well consider this. Americans get free trading, meaning no commissions in many of their trading accounts. Buy in at five dollars a contract and sell at six or seven dollars a contract. Make one hundred or two hundred dollars or lose that much if the earning report is not quite up to expections. In a way, it's very much just a game. Here was it's first quarter operating resuts. They do have cash on hand however they keep losing money. Let's see what happens.
In a recent blog I wrote about playing .01 and .02 cent options ($1.00 dollar and $2.00 dollars a contract) on the stock Ford. This trade I am now talking about is kind of the same type of "bottom fishing". It's trying to recognize a "blip-in-the-market"s that would only appeal to a small number of opportunistic traders. Power to them if they can make money on situations like this. Given the surge of contract traded on it today, it is apparent that some option traders are pinpointing this as being a tradable event. To be continued. A Wednesday check on this action at 3:20 p.m.. Bid $.07 ask $.08 with a high of nine.
Look at the crazy high volume. Its crazy when the stock is still well below the $2.00 level! More details to follow. Now the earning report. It was not so good however it wasn't all that bad. It has to be put into perspective that most shareholders have gotten in at higher prices so to them it is comforting to note that the lost this seems to be getting better and better every quarter. That might a positive signal. I can't see the stock jumping upwards in the next two days to the lofty $2.00 mark so these options might quickly lose their value.
Now the closing day readout. Note the high of $.10. which would have happened in the last half hour of trading.
Penny options can sometimes suprise. I will follow up with how this series of Calls survives the week. *** Then there is Blink. It was up 8% today.
Do your homework. A Thursday report on the $2.00 series of Chargepoint Calls. The party is over.
The stock is not going to $2.00.

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