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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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Midweek Trading - The Week Following an 878 Point One Day Drop Last Friday. Walmart and Carvana Got Crushed On Thursday

The markets are shrugging off last week's big drop on Friday. As of late the markets have always seemed to have come back up again. Now a snapshot view of three different companies at lunch time on Wednesday. All are in strong upticks. Fighting strong stocks is a recipe for failure. Or is it? It will be interesting to see what happens. 1)
Trumph is busy changing the prices on drugs and other things. Most stocks in this sector have rallied over the last couple of weeks. Only six contracts of Puts traded in the first half of the day on the "at-the-money" options on a morning the stock has jumped upwards almost fifteen dollars. There is a reason for this small number. Given the recent volatity of the markets in the last three or four sessions, traders are less willing to dabble in Put positions on individual stocks trading in uptrends. Caterpillar for example such a stock. It's up $42.00 in three days and traders are afraid to play it on the downside. 2) Walmart. What do you think is happening with this stock? It has jumped over $8.00 in two trading sessions. Walmart as of late is having a nice run upwards.
I want to explain the open interest number and the volume of trading number. An army of traders trade these Walmart options interday and tend to shy away from the opportunity of holding option positions overnight. They must do this for a reason. Tracking and trading interday moves has become a bit of a game of cat and mouse. You can almost play them everyday and make up as you go your own reasons as to why it works. It's now 12:07 p.m. and the Puts are trading at $1.05. Here is how they closed the day.
When you're playing rising stocks these kind of results can happen. 3) Carvana. This stock has a widely know history of being manipulated.
Some traders are willing to trade these options knowing there is an a volatility component with them which offers the chances for quick rewards. Nimble traders can be rewarded. All three of these positions are Puts. Let's watch this action. Puts in a rising market. How dumb is that? It's now Thursday morning. Watch what happened to Walmart on the opening. It drops.
Nimble traders may have caught this. Eli Lilly also had the same kind of dip ($7.00 to $8.50) before it started to charge up again.
Carvana opened strong and didn't offer a morning dip.
Traders are trained in these markets to buy on the dips and are usually afforded this luxury minutes after each morning's openings. Now watch for Thursday's action to unfold. It's not going to be what you might expect. Here is where playing the downside on all of these high flying stocks paid off. 1) Let's start with the $822.50 Puts on Eli Lilly. Yesterday they closed at $7.00. Today Thursday they closed at $8.28. Not much of a gain there. 2) The Walmart 109 Puts. Yesterday they closed at $1.05. Today they closed at $2.52! The stock was down $2.56 on the day.
3) Carvana . Down $10.94.
Yesterday the $355.00 Puts cloed at $6.06. Today they closed at $12.57.
The markets were down on the day.
Yes you can play short term Puts in rising markets.

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