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Option Clips: Caterpillar Inc., Target, and 3D Systems Corporation

Reviewing notable options activity on Caterpillar Inc., Target Corporation, and 3D Systems Corporation

by 1/27/2014 2:00 PM
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Three equities drawing attention from options traders today are construction concern Caterpillar Inc. (NYSE:CAT), retailer Target Corporation (NYSE:TGT), and printing solutions specialist 3D Systems Corporation (NYSE:DDD). Here's a look at how traders have been aligning their speculative bets today.

  • Caterpillar Inc. (NYSE:CAT) is up 4% this afternoon to $89.58, thanks to this morning's better-than-expected fourth-quarter results and upbeat forecast. Despite this, put volume has soared to nearly six times typical intraday levels. The most sought-after position is the weekly 1/31 90-strike put, where a healthy portion of the 7,306 contracts traded have done so on the ask side. With volume outstripping open interest, it appears that some of these positions were bought to open, as traders anticipate CAT's post-earnings glow to fade by week's end.

  • Target Corporation (NYSE:TGT), meanwhile, tagged the $57.38 mark this afternoon -- its lowest point since July 2012. At last check, though, the stock was trading at $57.61. One of the more active contracts in TGT's options pits is the weekly 1/31 59-strike call, which has seen nearly 1,100 contracts change hands. All of these have gone off at the bid price, implied volatility (IV) is higher, and only 362 contracts make up open interest here, pointing to sell-to-open activity.

  • 3D Systems Corporation (NYSE:DDD) has shed 6.3% so far today, after Needham cut its price target on the stock by $5 to $95 (the new price target still represents a hefty 27.6% premium to DDD's current perch at $74.81). The negative price action put the equity on the short-sale restricted list. Meanwhile, overall options volume is running at a 74% mark-up to its average intraday pace. On the call side, speculators are targeting the February 80 strike, while put players are honing in on the February 70 strike. The majority of contracts at each strike crossed on the ask side, and IV is up, suggesting new positions were initiated.

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