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The DJIA Index Down over 900 Points With An Hour Left In the Trading Session.

If it wss down 600 points at this time in the trading session and not down over 900 points you might expect to see a slight rebound in the final half hour of today's trading. That doesn't seem to be the case. The over 900 point drop in the indexes adds an element of scare. Now Caterpillar which is down over $19.00 on the day. Would this be a good time to catch it for a rebound? Is has being a particularly strong stock as of late. Might it be one of the first stocks to rebound after today's train wreck of a day? Look at the 625 Calls that expire at the end of the week. Only five contracts have traded on the day. Traders are not rushing to buy back into it looking for a strong close. Yet they are more interested in the Call options on it about ten dollars "out-of-the-money". They cost less but will be slightly less sensitive to only a one or two dollar rebound. They need more of a bounce in the stock's price. Here they are. Now here is Caterpillars one day ch...
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Caterpillar - It's First Quarter Earnings Report And Traders Are Staying Away. A Read Which Might Be A Good Reference Point Going Forward.

Boeing rallied yesterday on the release of it's earnings report only then to tank. Caterpillar is tanking this morning in the premarkets. Let's begin with it's 5 day and 30 day chart.
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The world needs to be rebuilt and Caterpillar is there to help. It's growing, it's got a good reputation, it's not laying off employees and it's doing just fine. If it misses a beat on it's earnings report so what? Life goes on. Then there are those pesky analyst who are known to offer a convoluted spin on things. If you like Caterpillar just buy it on the dips and put it away. So the markets will be opening on the commentary by the companies C.E.O of "sales about flat". Phrasing it that way is a recipe for short term disaster.
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The two printouts above show some of the early morning action in one Put series and in One Call series. What happened the next day? A slight rebound with next to no traders trying to capitalize on a rebound. What does this tell us? It tells us option traders in general stay away from trading the "release of earning reports" on Caterpillar.
Now the one week out Call options.
Low open interest, a low volume of trading and relatively big pricings considering the these are only slightly "in-the-money" Calls which might take a few seeks to gain value. The bottom line is that this stock really got beat up and going forward it's going to be again upward journey. It helps that they are buying back their own shares. ** Now a look at how Caterpillar traded at the close on Monday April 29th.
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The volume of Calls traded is very light. That's suprising.

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