January 28, 2021 Terry’s Tips Trade Alert – Earnings  Eagle Portfolio

Caterpillar (CAT) reports earnings before the bell tomorrow. The options market predicts a move of 5.3%, while the average move over the past eight quarters has been 3.5%:

BTO 2 CAT 19Mar21 180 puts (CAT210319P180)
STO 2 CAT 29Jan21 180 puts (CAT210129P180) for a debit of $6.10 (buying a calendar)

BTO 2 CAT 19Mar21 175 puts (CAT210319P175)
STO 2 CAT 29Jan21 175 puts (CAT210129P175) for a debit of $5.40 (buying a calendar)

BTO 2 CAT 19Mar21 185 calls (CAT210319C185)
STO 2 CAT 29Jan21 185 calls (CAT210129C185) for a debit of $6.00 (buying a calendar)

BTO 2 CAT 19Mar21 190 calls (CAT210319C190)
STO 2 CAT 29Jan21 190 calls (CAT210129C190) for a debit of $5.70 (buying a calendar)


Be prepared to change this (these) price limit(s) by $.05 or more in order to get an execution.

Happy trading.

Terry