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Bad News On Caterpillar Going Into a Friday.

Here is how the stock traded on a Thursday.There was nothing unusual about the day. I am suprised they would dump this news on the market going into a Friday trading session. It messes up option traders. Doing this type of an announcement on a Tuesday prior to the markets opening would be a less disruptive day to do this. Here is the news. In a way this wasn't totally unexpected news. As they said, there were several other recent updates on this issue. Auto companies in their recent quarterly reports were harping on this issue. Look at how it dropped in price in the after market trading. Now here is how one series of Puts closed the day. Look at how this news totally caught the markets by suprise. The secrecy of this news is a credit to Caterpillar. If Caterpillar had this news are Deere Call holders going to get worried? Here is what happened on Friday morning. Now Deere which is now also trying to shake off this bad news. These two stocks tend to trade in similiar ways. He...
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Caterpillar On A Monday Morning After A Week Where it Jumped $27.88

What do you think the stock is going to do this week? Here is what it did last friday.
Now here is what it did in the last 30 days.
If you think it might go down on the week here is last Friday's closing price on one series of Puts which are just over five dollars "out-of-the-money".
Can you see they cost $2.96 per contract and only 119 of them are outstanding? Option traders on last Friday's close were not rushing into buy them. But wait, why not buy the Puts closer to the stocks current selling price? Why not buy the 435 series of Puts? Well they cost more. The 435 Puts last Friday closed at $4.93.
The 435 Puts would be more sensitive to any minor dip on the opening however Caterpillar could still easily gain another five dollars on the day. That's why the interest in these Puts is so low. Here is what Wall Street thinks.
So what do I think? I know this stock reserves respect and it's hard to fight any stock in such a strong uptrend. Here however on a Monday morning is a chance to catch a slight pause in this stocks recent upwards projectory. Weekends often provide market resets. The 435 series of Puts could jump 20% or 25% in the first fifteen minutes of market trading making for a quick trade. Let's see what happens. ** It's 10:00 a.m. and no such luck. The DJIA is down and Caterpillar sits very much unchanged.
Now a look ten minutes later. Look at how the stock has dropped. Finally the Puts are starting to go up and the volume is increasing in them.
Now here we are another ten minutes later.
Here it now at 23 minutes later.
Now here is a look at it's five day chart. What do you think about this type of chart?
Here is how Caterpillar the two series of Puts we are watching closed the day.closed the day.
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There is news on Caterpillar.

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