The big option trade of the day for Caterpillar appears to be a bet that the stock won't fall back to where it found support just a month ago.
Caterpillar was up 0.46 percent, finishing the session at $59.18. It remains below the 52-week high of $64.42 set on Jan. 11 but recovered nicely from support down near $50, where the price was a month ago.
- Options Tips from Jon Najarian
- Read The CNBC Stock Blog
- Options Tips from Pete Najarian
OptionMonster's real-time systemsdetected one block of 25,000 of the August $52.50 puts traded for $2.92. This was against open interest of just 2,608 contracts, so this was clearly a new opening position.
The puts appear to have been sold, indicating that the seller doesn't think shares will return to that level before the August expiration. If it does drop back to the $52.50 strike price, the trader will be required to buy 2.5 million shares of Caterpillar at that level.
Options Trading School:
Caterpillar Competes With:
Chris McKhann is an analyst and writer for OptionMonster.