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Caterpillar - Catching A Reversal On A Monday

Mondays are not the best of days to look for reversals however Caterpillar jumped upwards a modest amount which impacted the value of this series of Puts. The Puts are off about 50% on the day at this point in time. This is a 1:36 p.m.readout. Here is it's five day chart. Now its one day chart. It's Puts. Why consider them? It would seem like kind of a random thing to do. 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 all of last weeks business articles talking about how Caterpillar could potentially benefit from all this new AI movement. Caterpillar afterall builds heavy equipment which can be used in the construction of nuclear reactors. Notice that the five day chart is in an uptrend and notice the small open interest numbers in the Puts. That's understandable. No one wants to hold Puts on Caterpillar when it is in this...
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Things Are Happening Quickly With Trump Coming Into Power.

Look at this. Pfizer. It's five day chart. What is happening? Look also at Eli Lilly's five day chart.
Now look below at how Eli Lilly sold off again, this time on Monday morning. The news of what was happening was further decimated over the weekend.
Can you jump in now and play it for the upside? Perhaps but who would want to? Call options on it are so expensive now that this time it would have to rally way more than half of what it just lost so far today just break even by the end of the week. Who would want to take this risk?
Now a question. Why is the open interest posted above at zero now? Well traders last Friday looking for a rebound where busy purchasing the 745 series of Calls instead. Not this series. Now here is how the 715 series of Calls closed out the day. They ralled over $4.00 a contract since we first looked at them.
Here is now what it's five day chart looks like at the close on Monday.
Now consider Pfizer. Might it rebound a touch at this point in time? Well options with less than a week to go in the twenty five dollar price range are dangerous. Here is a look at how it's "in-the-money"$24.00 series of Calls options with ony four trading days to go are trading at the end of the day on a Monday. Will they pop enough on the opening tomorrow to get out with a 50% profit? "In-the-money" Call options in this price range sometimes offers this potential. Not many traders were jumping into them today. Friday, when these Calls expire is still a long ways away.
No such luck. The DJII is down on the openining 325 points.
Eli Lilly is also down just over $10.00.
To be continued.

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