CAT Puts

Caterpillar just had earnings come out and they were lousy. Read my January 26th blog, That was only only four days ago and it's easy to find. There you will find charts and option quotes which I just updated to complete the story showing how crazy it's price drop was. Holding both both a Call and Put at the same time just prior to the release of it's earning report could have worked out nicely, or better yet, just the purchasing of a Put. Here is a chart of how it sold off in the first fifty five minutes of trading this morning. It's a respectable drop which made all Put holders very happy. So here is a new question. Is there now an opportunity to play a rebound? Today is January 25th and there are beaten up Call options on it that expire tomorrow. Buying a Call option on it that expires in one day is an extreme risk, especially with all of Trump's meddlings. Now look at the pricing of the "one-day-to-expiring" Caterpillar Call option. Can you see how t...

Look out. Option players can get whipsawed. A good earnings report can turn out to be a bad earnings report. If you have time read this. Here is how G.M. traded yesterday after the release of their quarterly earnings report. A heathy earnings report and the stock sold off in price. Now these two readouts. With the stock closing at $50.02 cents might it rebound on the morning after? Now look at this. These options in the first hour of trading don't know what they want to do and they still have a few days life left in them. Ford has an earnings report coming out Feb. 5th. The results of G.M. large cash flows might tweak the interest in owing Ford Calls. Folks this is real time action where trading decisions abound. Here is a 10:03 a.m. printout of how G.M. is trading on the day. The stock is doing nothing. Let's look now at the Ford short options knowing their earning report is coming out in a few days. . Here is it's five day chart. It sold off yesterday in sympathy...

If it goes up you make money.The stock is in a sweet spot. Look at it's chart. I did blogs on Walmart on December 16th, 19th. 31st and Jan 7th and 8th. Stocks in the $90.00-$100.00 price range will swing a dollar or more everyday and the option series are set up in $1.00 increments. Those two factors alone are the key ingredients that draw me to this situation. Read my past blogs on Walmart to get a better sense of what l am talking about. Yesterday was a big day for Walmart options. Do you agree these options are playable? I think they are. Yet maybe in a week or two my view about this one will change. Please my past few blogs on this one to get a better handle on why I like them. Once again, I think it's in a sweet spot. Now the Jan 30th opening.

What a week for Caterpillar. Now this. A printout showing how one series of Calls, the $390.00 series traded on Tuesday last week. Thursday was January 23th. It was up over 313% in one day. If you look at the chart you can see how the stock moved up. Now look at how the same series of Calls closed out the week. Now notice the small volume of trading in this series of Calls and notice the very small outstanding "open interest" numbers. Caterpillar has over 130,000 employees. It boggles my mind that it's Call options don't have more of a following. I have mentioned this before and many of us know one of the the reason why. Caterpillar never has much gossip to talk about, other than the strike it had last year. Contrast this to let's say a stock like Apple. Apple like Caterpillar has an earnings report coming out this week. What might happen to it is widely reported. Wall Street is bracing for a weak iPhone sales number, especially in China, and a guide down for t...