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What Do I See Here. It's Disney In Nose Bleeding Territory.

First it's five day chart. There was news this morning which might be attributable to this morning's jump in price. Ai news should always be taken with a grain of salt as it's doesn't add to the bottom line profits overnight. The markets jumped today big time. Do markets sometimes take a pause after big jumps like this? That's the question and that's why I am attracted to it's one day Puts today just prior to the closing bell. A fifty cent selloff in tomorrow's premarket or shortly after would cause these Puts to jump by 50%. A double in price on the Puts would take a bigger move down than fifty cents. Might the stock give back one half of what it gained today? Here is how it is trading in the aftermarkets on Thursday. One concern is the light open interest numbers. This makes for larger than usual spreads between the "bid and ask". Let's hope it's a get-out-quickly situation however there is still lots of trading life left in thes...
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So Caterpillar Has Another Twenty Dollar Price Swing In One Day

Here is it's chart on the day as of 3:37 p.m..
It's a Thursday with option on it expiring tomorrow. I want to show you how some of the "out-of-the-money" Call options have traded today. First here is how the markets are doing in the late afternoon.
Now look at these three series of Call options. They are all "out-of-the-money" Call options.
What are the odds of ever catching this action? It would of have required the mentality to be willing to buy them on this morning's dip. That plus the stomach to purchase Call options which are "out-of-the-money" with only one day to go. It's not everyone's cup of tea. I understand that. So once again, Caterpillar has had a healthy upsurge on the day. Would it make any sense to be looking at tomorrow's Puts? Well check out this one series of "at-the-money" Puts.
They actually look very reasonable in price. So the question now is why are so few trader's finding value in them? One reason is that if Boeing jumps a bit on tomorrow's opening these Puts could quickly lose half their value. Boeing's five day chart will now help to better put all of this into perspective.
Getting into Caterpillar Calls on Wednesday morning was the real way to go. Wednesdays are often reversal days. Option traders must learn to watch the markets for these types of moves. ** On a different note, think of the massive amounts of money made on today's Call options. I find it now strange that so few traders are willing to gamble on tomorrows opening. Let's check next weeks Put options with the same striking price to see if any of today's profits ended up going there. Here they are.
The answer appears to be not really. There was only one open contract outstanding going into todays trading session. This means no one had the appetite to be fighting this charging stock. I get that. Let's see what happens tomorrow. The question is, are option traders smart to be avoiding Caterpillars potential to drop in price tomorrow? We will soon find out. To be continued.

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