Caterpillar Inc. (CAT) Traders Gamble On an Extended Retreat

Caterpillar Inc. (CAT) puts are trading at five times the average intraday pace

Mar 5, 2015 at 11:30 AM
facebook X logo linkedin


It's been a tough few months for Caterpillar Inc. (NYSE:CAT), which has shed nearly a quarter of its value since hitting its most recent high of $107.12 on Nov. 21, due to pressure from its 40-day moving average. The stock is extending this slide today, despite a broad-market uptick -- off 1% at $80.87 -- and options traders think there's more downside ahead.

Daily Chart of CAT Since November 2014 With 40-Day Moving Average

Taking a quick step back, puts are trading at five times what's typically seen at this point in the day, and are outpacing calls by a 3-to-1 margin. The round-number $80 mark is in focus today, with possible buy-to-open activity detected at CAT's weekly 3/27 80-strike and April 80 puts. By initiating these long puts, speculators expect the security to breach the strike price by the respective expiration dates.

Widening the sentiment scope reveals it's been call buyers who have been active in CAT's options pits. Specifically, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 0.89 ranks in the 80th annual percentile. Simply stated, calls have been bought to open over puts at a quicker-than-usual pace in recent weeks.

On the fundamental front, Caterpillar Inc. (NYSE:CAT) announced today it has taken a minority stake in analytics firm Uptake. This comes just weeks after the company said its subsidiaries are being investigated by U.S. authorities.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI