Pre Market Gaps + New CAT Trade SEP 12, 2024

Lots going on here in the Pre Market today, lets get to it.

The market is strong this morning. We look for strength, one of our favorite tenets is “Strength typically creates more strength where as weakness typically creates more weakness”

ORCL is up Gapping Up again this morning now up over 6%
SN, yes our beloved 😁 SN is now up 1.20% this morning
MRNA however is Gapping Down again by over 4% here
Seeing a theme?

Since we like strength lets talk about that and one we feel that is worthy of a look
CAT Caterpillar is offering us a beautiful set up by bouncing off the bottom of it’s recent long term box. Notice that we have 2 charts this morning? Take a look at the annotation on both of them.

Options: Strong here
Lets start with the 18 OCT 2024
The 340 ATM Calls are going for $11.45 with an OI of 522 with an IV of 23
The Puts side? 10… Yes I said Ten….

The 370’s are going for $1.77 with an OI of 1,531 and an IV of 23
The Puts side here are at 10 also

CAT reports earnings on 23 OCT 2024

15 NOV 2024 it gets interesting
Prices escalate dramatically
The one way to offset that for both paying less, and for protection in any down side, is utilize a protective play strategy such as Bull Call Spreads’ or Calendar Spreads for weekly income generation every Friday.
Calendar Spreads are literally the same as getting a paycheck every Friday at 415pm EST each and every week, only you don’t go to work, your money goes to work for you. Lets talk more about that later.

Speaking of being strong and CAT. I have a good buddy that is a great investor and a long time CAT proponent. The 20 year chart of CAT is for him, and you guys of course!! 😃 Today he is 44 months post heart transplant and takes nothing, and no one for granted. Taking things or people for granted is like stocks selling off. His stock in this game called ‘LIFE” is getting stronger every day.

S+P is green this morning. New support is at 5,560, that is progress. Time to grind.

The Options Coach