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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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Walmart. Does Five Days Buy You Enough Time?

Let's set the stage.
A five day chart and the current bid and ask on an "in-the-money" Call option by $.31 cents.
Notice the tight bid and ask. That's a good thing. Now this morning's early trading.
Light open interest in this series and light to moderate morning trading in these series on the opening. Would I want to hold onto a position like this for the entire week? It's kind of dangerous because at any moment an analysis could come out with a comment about "Christmas Retail Sales". It's something I would get into with the hopes of getting out of on the day. Imagine, people living south of the border that can find brokerages that don't charge fees on trading. In that environment nimble option traders can have a heyday playing options like this with a tight "bid-and-ask". Let's watch this one for a day and see what happens. Now this.
Thirty nine minutes later the stock is up twenty-two cents. What's nice about five day options is that time is not as much of a factor compared to trading options with only, one, two or three days of life left in them. Here we are now at 11:50 a.m. Call me chicken. I would get out. It's 11:50 a.m. It was a good ride with no hiccups. It doesn't always happen that way. Take a profit and run.
The end. Well not really the end. Here is how these Call options closed the day.They did actually hit a high or $2.02.00.

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