Caterpillar Stock Plummeting on Order Backlog Decline

Options volume is running at eight times the intraday average

Digital Content Manager
Oct 31, 2023 at 10:40 AM
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Caterpillar Inc. (NYSE:CAT) earlier announced better-than-expected third-quarter profits, amid strong demand for high-end construction equipment after infrastructure investments, as well as price hikes and cost controls. A falling order backlog is casting a shadow over these strong results, however, and sparking fears that the company could miss fourth-quarter revenue expectations. 

Last seen down 5.7% at $228.42, Caterpillar stock is today trading at its lowest level since June. Should these losses hold, the security will mark its fourth loss in five sessions, and its biggest single-day percentage drop since March. In the last three months, CAT shed more than 20%.

Options volume is already running at eight times the intraday average volume, with 16,000 calls and 18,000 puts exchanged so far. The popular active contract is the 11/3 225-strike put, with positions opening there, as well as the 230-strike call in the same series that is trailing just behind.

It's worth noting the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.04 sits in the low 15th percentile of annual readings, indicating short-term options traders lean bullish. In other words, an continued unwinding of optimism could create additional headwinds for Caterpillar stock.


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