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Caterpillar Calls Again.

Last Friday we showed how one series of options traded on that day. Caterpillar was up $21.96 on that day. The Call options jumped $6.91 or 46.96 %. Only 13 contracts traded. Today Monday was not much different. Caterpillar jumped upwards on the day. The same series of Call options, the 665 Calls with the same striking price jumped again ( only on one contract ) and closed the day bid $37.95 - ask- $40.40. It helped that the DJIA also jumped up. Now here is it's five day chart. All this on no real news except the angle that it makes power generators. So Caterpillar is up over $50.00 in only two days. What to do? Buy these short term Puts that expire this Friday? Fighting strong stocks at the start of the week using near to expiring options is to big a risk to take with so many stocks now in nose bleeding territories. Now this. It's one month chart. Trading volumes are up. When stocks get hot like this something has to give. The question is when. I don't like fighti...
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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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