Schaeffer's Options Update: Options Traders Selling Premium on Caterpillar Calls.
CINCINNATI -- Put traders have had a field day betting against Caterpillar Inc. (NYSE NYSE
See: New York Stock Exchange : CAT) so far this year, with the shares down more than 17% since the start of 2009. During the past two weeks, traders on the International Securities Exchange (ISE Ise (ē`sā), city (1990 pop. 104,164), Mie prefecture, S Honshu, Japan, on Ise Bay. It is one of the foremost religious centers of Shinto, the site of the shrines of Ise. ) and Chicago Board Options Exchange Chicago Board Options Exchange (CBOE)
A securities exchange created in the early 1970s for the public trading of standardized option contracts. Primary place for the trading of stock options, foreign currency options, and index options (S&P 100, 500, and OTC 250 index) (CBOE CBOE
See: Chicago Board Options Exchange
See Chicago Board Options Exchange (CBOE). ) have bought to open more puts than calls, resulting in a 10-day put/call volume ratio of 1.02. Meanwhile, CAT's Schaeffer's put/call open interest ratio (SOIR SOIR Schaeffer's Put/Call Open Interest Ratio
SOIR Simultaneous Operations on Intersecting Runways ) of 1.81 indicates that puts nearly double calls among options with less than three months until expiration. This ratio of near-term puts and calls falls just four percentage points shy of an annual peak.
But options traders' disdain for CAT is not a recent development. The ISE/CBOE 50-day put/call volume ratio of 1.32 also reveals a preference for purchased puts over calls, underscoring a deeper-seated level of pessimism toward the equity. What's more, this ratio ranks above 74% of all those taken in the prior 52 weeks.
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