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Step Down Charts And Short Term Options. Nio

Here is a classic "step-down-chart" with one minute of daytime trading life left in them before the markets close at 4:00 p.m.. The stock is Nio. ... This printout of "in-the-money" Call option also shows one minute of trading life in them before the market closes. It's Tuesday and these Calls expire this coming Friday. You are purchasing three days of market trading life. To purchase one thousand shares of this stock would cost you $5,750.00. To purchase options that control the price movement of one thousad shares of this stock for three trading sessions would cost you $370.00. ( Ten contracts at $.37 each). These Calls are also currently $250.00 "in-the-money" which means if the stock totally goes flat for the next three days your options will still have that amount of intrinsic value left in them. Now think about this. Many option accounts in the U.S. enjoy free option trading and there are discount brokers in Canada who can save you money. A fl...
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The Appetite For Caterpillar Options Going Into An Earning's Report Is Quite Small .

Let's start with this. Caterpillar has an earnings report coming out on April 30th. You should listen to it. It's not going to be difficult to find.
Now look at these how these two series of options closed out the week. The Calls are just "in-the-money" and the Puts are just slightly "out-of-the-money".The cost to play the upside with one week options almost equals what it costs to play the downside. That's kind of strange as usually the Calls cost more to purchase than the Puts. Both are super expensive however Caterpillar as of late can jump $15.00 or $20.00 dollars in one day. When I say super expensive what do I mean? 2,690 means $2,690 Americian per contract. That is not chump change. You would have to have a very strong conviction it was going to move one way or another before you would want to jump in. Yet there is bigger problem. The current price of the stock is in a nose bleeding territory. Look at it's one year chart. Is it really doing that great? Aren't raw material costs are skyrocketing?
There are naysayers. Yet before we talk about what they are saying I should mention that there are also numerous other stocks in these nose bleeding territories. Have you watched the bank stocks lately? Now look at these numbers. With numbers like this why has the stock doubled in price? Could things start to go wrong? Are profit margins starting to get squeezed?
Now a reflection on what happened in the first quarter. Here are some remarks posted by Caterpillar back on Januarry 29th about their previous quarters operating results.
What do I make of all this? I think just stay away. Caterpillar Calls in the recent past have paid off nicely. The now current reality is that if Caterpillar starts to go sideways this week the lofty premiums built into these two series of Call options could dry up to half their current value. Why do you need to take on such risk? You don't. Let's follow this situation and see what happens. It's to dangerous for me. ** Here is how Caterpillar traded on the week.
Can you see the $40.00 two day price increase in the middle of the week? It is this kind of action that makes these options so expensive. * A Monday morning update.
Now Tuesday April 28th.
Both the Calls and Puts are commanding high premiums and retail traders are not participating in this action. Here now is Caterpillars ninety day chart. There appears to be some profit taking happening.
Let's look at the 800 series of Puts. With only three days of trading life left in them this would be a very dangerous trade to be entering into. That plus Tuesdays going into Wednesdays are not my favorite time to be looking at three day left to expiring options.
Read my Jan 13th 2026 blog "Caterpillar Calls" Rock. I talks about Caterpillar which dip for only very short periods of time. Now Wednesday at the close.
Now at look at the 800 Puts. They closed at $16.40 on the previous day. With only two days of trading life in them I would just get out. The stock dropped on the day $7.40 on the Puts barely moved! The time value in these Puts vanished.
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Location: 4QX2FV5H+28

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