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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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Sept. 23 th. The DJI Up Over 800 Points and Caterpillar Jumps

I played Boeing Calls three times this week and won everytime. In a blog two days ago I reported I don't like playing options on Thursday that expire the next day. The reason being is that if you guess the wrong direction you will lose all your money. Failure is harsh medicine.That being said this time I was watching Caterpillar and it opened down as did the markets. Inflation report numbers came out and everyone got it wrong. I jumped in. Look at how it crashed on the opening.
I got in at 9:39 a.m. Look at the chart to see where the stock was at that time. Call me crazy. Here is a better "one day" look at the chart.
Now look at when I got in. I got in at 9:35 a.m. and paid $250.00 for one contract. The low on the day was $2.05 and that was before I got in. I had just made more than twice that amount in Canadian dollars paying Boeing so that's the way I justified my actions.
A drop of like six or seven dollars. For the first ten minutes after I got in I thought I was smoked! How could any stock rebound from a drop that large? Then it started to rebound ever so slightly and I just wanted my money back. The market could roll over and sink again. Anything could happen. In my quest to get out I fought with the option makers and cancelled two sell tickets before I got filled. Can you see above how that happened at 10:11 a.m. and at 10:21 a.m. I cancelled and resubmited a sell ticket? I was chasing the markets down. Finally at 10:21 a.m. I was out. Five minutes or so later it started to explode upwards.
Notice these options hit a high of $9.74 on the day and notice that only 125 contracts traded. Caterpillar has over 128,000 employees. Do the math. Only a small percent of them are playing options on their companies stock. Life is what you make it. Most people don't play options. Today I went to the races and I got spooked as the markets took a slight pause one hour into the morning trading.
Location: 911 A2, Edwardstown SA 5039, Australia

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