Schaeffer's Options Update: Caterpillar Targeted by Heavy Put-Selling Activity

Caterpillar (NYSE: CAT) put options have become increasingly popular of late. Data from the International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE) indicates that during the past 10 trading days, puts bought to open have outnumbered calls purchased by a ratio of 1.16 to 1. This reading is higher than 65% of all those taken in the past year, hinting at a growing bearish movement among options traders.

This trend has taken a bit of a twist in today's trading, however. CAT put volume has spiked to more than double its daily average, with some 23,000 contracts crossing the tape before noon. The activity has placed the shares on our Intraday Volume Explosion List, but a closer look at the most active April 28 put reveals that we may not be looking at the usual put buying that CAT has experienced in recent weeks.

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