Caterpillar (CAT) – Trade War Headwinds – May 28th, 2019

Bearish – CAT $122.90 – Industrial

The idea presented is the opinion of the Options Action staff and not a recommendation by OptionsPlay.

On Friday’s Options Action, the crew analyzed the performance of Caterpillar stock. CAT has underperformed the market for the past 7 years and continues to weaken as the trade war heats up. Coupled with slowing growth and weaker fundamentals, CAT may decline into earnings. Expecting CAT to trade lower, Michael Khouw suggests buying a July 120/110 Put Vertical for a $2.75 Debit. As of Friday’s close, these puts were trading at a $2.67 Debit.

We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: CAT Options Action Video

View CAT Trade

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