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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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Eli Lilly. A Continuation Of My Thursday Eli Lilly Blog

Yesterday's blog on Eli Lilly's massive one day price drop was exhausting to write and probably exhausting to read. Drops like this can be dangerous to play. I did my best to try to explain how I would play it. It's time to move on. It's now Friday after the close. Here is what Eli Lilly's one week chart looks like. The stock dropped again on Friday.
I ended that blog with a look at the Call option buying activity in the last three minutes of the day's trading. Speculators where getting in on the "one-day-to-expiring" Call options with a vengeance. Here is some of the evidence I presented. Eli Lilly closed the day at $640.70 and option players were jumping in to pay $405.00 to own the next day's, "one-day" Call options $10.00 "out-of-the-money". (The 650 series of Calls). What a gamble yet to me that made sense knowing how much the stock was down on the day, something like $100.00. Thursday's open interest at the close in that series of Calls was 1,168 contracts up from a total of 5 open contracts on the close of the previous day. Trader's saw this as an opportunity to make quick money. Now I would like to report that the next paragraph to are about to read and the next chart is something I lifted from my previous blog on this activity.
So what happened? Pay attention to this. Here is the action in the first 3:53 minutes of Friday morning trading. The Calls we were monitering at the close that were trading for $4.25 are now trading at $4.30.
* Monday morning's trding action with fresh eyes. the stock is up $10.00
What else is there to see? Do you see the high of $8.90 which is more than a double? Look at how quickly it happened and how quickly this price surge disappeared! Here is how Eli Lilly closed on the day and how the 650 Calls closed.
Next weeks action in the 625 series of Calls will be the next thing to look at. Here they are now. Only modest volume is pouring into them.
The game never ends. My little blog about Boeing jumping on Friday morning a couple of dollars looks silly compared to how complicated this option trading action is. ****** In a November 18th, 2024 blog I referenced how Eli Lilly reacted to Trumps announcement that he was nominating Robert F Kennedy Jr. to lead the U.S. Department of Health and Human Services. It sold off. History tells us that Eli Lilly is a slow stock to rebound after bad news. Yet I am still not convinced that this weeks news was all that bad. ****** Monday morning August 11th. The stock jumps on the opening.
Now at look at the 630 Calls. Players are now looking at this situation with fresh eyes.
That was an easy one to catch. Trader's had the weekend to re-examine the damage done.

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