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Caterpillar Is Misdirected.

It's five day and one day chart. It dipped on the opening this morning and the 'buy-on-the-dips' mentality won again. Like a $7.00 interday jump in one series of it's Call options as witnessed on the second chart below. Now it's 30 day chart. This is madness. How can a stock keep going up? Now this, a chart borrowed from a Caterpillar blog I posted on December 26th. That wasn't that long ago. It tells a different story. It shows Caterpillar dropping thirty dollars in one morning! So here we are now in a situation where Caterpillar is up $30.00 in three trading sessions. So here we are in the premarkets on Wednesday morning. Wednesdays can be good days for market reversals. Here are the 630 series of Puts that expire this Friday. The open interest in them as with all of Caterpillars options are very low. The stock given given it's premarket pricing is expected to open slightly lower than it's closing price. This $600.00 dollar pricing is in $U.S. ...
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A Follow Up To A Recent Blog I Did About Playing Two Week Options

Let's begin by saying I am not a big fan of buying "two-week-out" options. Yes they cost a touch more than "one-week-out" options however that is not the reason why. I like thirty day out options and one year out options and Monday, Wednesday and Friday "one- day-options" better. So what's the matter with "two-week-out" options? Here is my answer. Back on January 6th we looked at the Interactive Brokers Group 180 series of Calls that expire on January 17th. At that time they were trading at $4.90 a contract. Here is a look at that printout I posted.
Now this, a Friday January 10th printout. The DJIA closed down over six hundred points on the day.
So here we are at the end of the week and we have for lack of a better word, wasted four days or almost half the life of these options. But wait. Can you see how they where down 47.66% on the day? That means on the previous closing session they were trading at $6.25 per contract. (It's a brokerage company so it's obvious it's going to drop on a day the market has a big sell off). Now a look at it's five day chart.
Imagine buying Puts on it on the morning rally on Tuesday morning and getting out at a huge profit minutes later at about 10:30 a.m. If you follow the charts wouldn't you recognize that could happen? If you answer yes then why do you need to clutter up your mind with "two-week-out" options. I say this because I feel more secure playing five, three or one day options than I do playing "two-week-out-options". Yet that's only me. ** Yes there was a decent profit to be had on the "two-week-out" options preceding Fridays precipice slide but that's another part on the "two-week-out" option holding syndrome. The urgency to take profits isn't there compared to playing shorter term options. ** How did these 185 Calls end up trading on January 17th?
Bottom line. The options on this stock are more interesting than most.

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