Schaeffer's Options Update: Options Traders Selling Premium on Caterpillar Calls.

CINCINNATI -- Put traders have had a field day betting against Caterpillar Inc. (NYSE: 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) and 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) 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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