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CAT Shares, Options: Master Trader's Strategy

Following bearish options activity that we reported earlier, Caterpillar posted fourth-quarter profit of $661 million, or $1.08 per share this morning, compared to $975 million or $1.50 per share in the prior year period.

That's about $0.23 EPS under Wall Street estimates.

CAT, which also says it is will offer buyouts to 25,000 employees, is already down more than 8 percent to about $32.50 five minutes after the open. The shares closed at $35.66 Friday and fell another 1.4 percent in after-hours trading.

  • CAT: Insider Trading
  • CAT: Complete Options Data
  • More Options Tips from Jon Najarian

I am covering half of my position in the puts by purchasing stock. If CAT bounces, we may make money on our stock hedge and on the puts.

Other than waking up and having my kids hug me, this is about as good as it gets!

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Who Else Announced Job Cuts Monday?

Pfizer

Sprint

Home Depot

ING

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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.

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