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What's Next For Caterpillar And Deere

Let's start with Caterpillars five day chart. You can see how it zoomed upwards this week as a result of it's quarterly earnings report. If you want to play the downside next's weeks options are going to cost you something like $1,000.00 per contract. Here are how one series of Puts, the 575 Puts closed the day on Friday. So the stock has to drop like $12.00 in five trading sessions just to break even. What a daunting challenge trying to figure out these ones. Many option players accustom to playing the ups and downs of Caterpillar when it was trading at price levels like $325.00 only six months ago now feel totally out of the game. It's now not a game for the little guys. I get it. Now this, a look at how Caterpillar traded on the day last Friday. Between 10:00 a.m. and 12:30 p.m. the stock dropped $15.00 dollars. The one day options that were expiring that day had an amazing price swing. So a new trend I see happening is a shift away from playing one and two week o...
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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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