CATD trade ideas
Opening CAT Oct 6 Nov 17 125 Put Calendarwww.tradingview.com
This is what I call a Ecalendar for pre earnings announcemnet calendar spread to take advantage of the volatility expansion that occurs somewhere from 30-45 days before an earnings binary event. CAT is one of many that pops up (the IV) like a gear tooth in a clear pattern; my goal is to place the trade before the pop and profit from the rise in premium.
For the week or three that this should approach target the ideal is no price movement - so I chose category support and resistance but in honesty the price history has little importance to me on this type of trade. The important characteristics I want are high option volume, high open interest and low premium bid/ask spread in those expiries that I may roll through before final exit (in short liquid open contracts).
Trade Price: $3.00 ($300 per contract)
My target profit for this trade: .37 ($37/contract) This is a preset closing order and is reset for that amount after rolling either leg as well.
The trade is defined risk and that is the only loss management involved (no stop loss orders).
Theta 0.62
Delta -4.21
CAT price at open of position: $124.38
CAT Rising Wedge & Long Term ChannelCAT has more than doubled since 2016. Price action has taken the stock to its highest levels since 2013 even though revenue has remained relatively flat. Notice the Rising Wedge chart pattern which has reached the top of a Long Term Channel. Volume has been decreasing and other indicators suggest the stock is overbought. FlashPoint Trading is looking for an initial retracement to $110 with the potential for further weakness and price action below $100.
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CATWe are at a very strong resistance level as we have up move and average volume which is decreaisng. The last month is disbalanced, because the spread of the bar is wide and the volume is less compared to previous bar's spread and their activity. So it would be a good idea to buy put options.
CaterpillarWe are at a very strong resistance level as we have up move and average volume which is decreasing. The last month (July) was disbalanced, because the spread of the bar is wide and the volume is less compared to previous bar's spread and their activity. So it would be a good idea to buy put options.
Short Put - CATCash flow play here.
High IV in CAT due to earnings soon. $100 put is trading for $1.15, or 1.15% ROC. This is 7.4% below the current price. We are looking at around $2.16 in premium per day, if not more if the premium gets sucked out faster.
CAT currently has a 2.93% divvy yield as well, if I do happen to get assigned shares. Upon being assigned, I would look to immediately sell calls for more basis reduction.
ARBITRAGE SELL DEER BUY PACCAR INCPE RATIO DEER 21, PACCAR 16
PRC. GAP HAS WIDENED UP IN PAST MONTHS. NOW IT SHOULD BE CLOSED...
Elliott Wave Analysis of Caterpillar (CAT)One way to suggest the end to an impulse wave, bulls need to be cautious as the recent gyrations could also be suggesting an ending diagonal
CAT - Caterpillar has a big hill to climb. This long-term chart looks at the relationship between Caterpillar NYSE:CAT and front-month crude oil futures
The week so far has seen a few points shaved off CAT's 30% rally since election day, when it hovered around its 50 week average. The stock has been pounding against 5 year resistance while mostly shrugging off weakness in Crude. But with no clear path ahead for oil prices and an uphill battle for any infrastructure bill through Congress, can CAT bust through the trend line and "grow into its multiple" as so many analysts predict?
NYSE:CAT / NYMEX:CL1!
Long CAT by Selling June 30 Put Spread 98.5/91.5CAT pulled back after gapping up post earning. It started to re-bounce. I would like to long CAT by setting up a Put Spread.
Position:
June 30 Weekly option: -1x98.5 /1x91.5
Premium: $0.96
Max Risk: $604
Breakeven: $97.54
PoP: 73%
Target: 50% of the premium.
