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Caterpillar Puts On A Friday Morning

I am getting some flack from people saying I should have called this site CatCalls and not CatPuts. Oh well, I saved money by going with name Catputs. Now this. Caterpillar closed at $647.18 on Thursday and jumped to $655.54 at 9:47 a.m. on Friday morning. Then it dropped to 641.44, the low of the day at 10:43 a.m. which was 56 minutes later. That's a massive price swing. Looking for price swings on one day options are not normal trades to be thinking about. I get that Look at how this one series of Puts reacted. Option trader as I have often mentioned are afraid to play options on Caterpillar as it defies logic and continues to go up in price. It has an earnings report coming out at 8:30 a.m. on Thursday January 29th. Try and listen to their conference call. Profits may not be as rich as some people are expecting. Input costs have risen. Now let's look at the 650.00 Puts to see how they traded on the day. So few traders attempt to trade in them. Look at the super low open i...
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Roku And It's 2nd Quarter Earning Report

Let's start with the time period of Thursday morning with an earning's report coming out after the closing bell. Look at how crazy expensive these three series of Call options are. They are the Roku "out-of-the-money" Call options that expire tomorrow. The volume in them is not all that crazy but if I owned the stock I would be tempted to sell the Calls against my position and hope they would expire worthless. Tomorrow is Friday August 2nd.
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Why pay so much? Why pay $4.05 for a Call with a striking price of "58" with one trading day to go in the contract? The stock would have to jump four dollars just to get your money back? Talk about stupid? Yet then again Netflix, a company also in a similiar space sometimes moves like ten dollars in one day. Here now is a look at what happened by showing tomorrow's five day chart.
Down $2.19 on the day to $53.14 with the DJIA down over 600 points.
Say goodbye to those Calls if you ever bought in. Now let's look at it's year-to-date chart.
Can you see how it dropped about $35.00 quickly on the release of it's first quarter's earnings? That's part of the reason why these Calls were so expensive. On good news it could have really popped. So what were it's second quarter earnings actually like?
It's still reporting losing money per share however their guidance is starting to look more promising. Having the markets drop over 600 points on the day (it was down even more than at one point during the day) really squashed any upside potential. The game never ends. Here now is how next weeks 53, 54 and 55 series of Calls are trading.
Pick you battle. How did things turn out four days later in a crummy market? Not good. Look at these same options. People however are now waking up to the fact that the quarterly earnings report was not all that bad. Trading options is never a walk in the park. There is still time for these Calls to suprise.
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