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A Jumpy Week For Caterpillar - A Week With Earning Reports

Here is Thursday's trading on the day on Caterpillar. Here is how the $417.50 calls that expire tomorrow closed the day. Something happened this week. Caterpillar had a quarterly earning report come out on Tuesday. It's stock trading action survived this news unscathed. Here is it's five day chart as of the end of Thursday. Maybe the 420.00 or the 422.50 series Calls are better to look at? Here they are. But wait. Deere got clobbered today on the release of a quarterly earning's report. Why didn't Caterpillar sell off in price in sympathy? It shoud have. Deere sold off $34.70. For this reason alone I would be more inclined to purshase the Puts. Here is the series I would consider. To be continued.
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Trying to Outguess The Markets

A few years back the markets crashed when Russia invaded Ukraine. The front pages of newspapers around the world at that time showed people trying to escape cities which were heavily shelled. Our heart's sank. How could such atrocities be happening? Why were schools and hospitals targeted? War is evil. Guess what? With Trump acting as a new dictator the world once again has gone awry. It's scary that one old man with so much power can abuse the system. What does all of this mean for option traders? It means time to sit it out on the sidelines. Yes you can jump in playing rebounds and catch some nice short term directional moves. You are basically trading against computers. Why not just sit it out and chill? Everything is amuck. Why be trying to make hero trades? Ironically enough some traders are being drawn into this action. Look at this chart.
While its difficult to see because of a "pop-up" on the screen "Netflix rebounded over ten dollars a share after rebounding from a previous low two days ago. Making a trade to catch the upside would have been a "hero" trade, meaning one that took guts to execute. Get in and get out and catch a ten dollar bounce based apon a techical bounce off a previous low. Cool stuff right? Not really. The markets are crashing and these are Call options that expire in one day on a stock that is a freefall. Now this, an hour or so later. A $27.00 drop has turned into a $53.00 drop.
A further drop later on in the day with the stock down $84.36.
This series of Puts shown above went up over 400%. To what was this sell off attributable to? It doesn't really matter. Here is one explanation.
My point is to let the markets reset themselves. Now this, a look at how another series of "out-of-the money" Puts, the 950 series traded on the day.
Some traders did catch the action. Small fish stay away. Happy trading days will return.

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