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Caterpillar Drops $60.00 In Five Days - Noon On A Wednesday

In past blogs I have mentioned how light the volume of trading is in Caterpillar options. Trading them is a challenge. Deere options are also like this. Caterpillar can and does (in recent times) swing $10.00 on any given day. It is noon on a Wednesday and this the one day of the week where you can look for reversals on "one-week" options expiring on Friday. I have talked about this many times before. Here are it's five and one day charts. Now a look at two of it's Call option series. The 560 series actually offer excellent value given how large it's morning drop was. Who cares to check the news on it? When it drops this much this quickly the bad news, if any, is already baked into the equastion. Now the second series of Call options I am showing you are $44.00 "out-of-the-money" and expire in 2.5 days. "Out-of-the-money" Calls to this extreme are a speciailty item. In layman's terms they are a longshots. They can be excellent trading veh...
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Deere and Company - One Of The Most Dangerous Series Of Call and Put Options to Play When There Is Only Hours To Go.

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If you have winnings from a previous trade sometimes you value that money differently. It's difficult to explain why but there are scholars out there who have written books on this very topic. It's like play money or free money that you can now use to make the wildest option trades you can think of. It's money you feel you can risk. It's like being a kid in a candy store with money in your pocket. Everything looks good.There are two stocks that I sometimes follow, Dominos Pizza and John Deere. Both have options available to trade on them however the Call and Put options on the first one, Dominos are near impossible to trade. Why? Well on a Friday morning with options expiring that day on it, how do you predict which direction the stock on the world's largest pizza company is going to go? The answer is you can't. The company is painfully aware that one news release about the price of cheese going up or problems with their ordering apps could send their stock int...
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