Option Swing Trade in $CAT

Swing trading is all about momentum…so when we see a stock either changing momentum or breaking through a potential resistance we take notice.

In our TNT option trading service we spotted Caterpillar ($CAT) after a post earnings consolidation start to make a bullish move to its 50 day Simple Moving Average.  Once the stock started to break we told our subscribers of the potential move.  Some subscribers jumped in for the short term and made a quick 30-45%, while other traders played it to reach the 100 day SMA.

On May 8th, the May 11th,2018 Expiration 148 calls were offered $3.10 on the close.  These were slightly in the money calls with about 67 delta.

The next day the stock broke out and went from 149.93 close on May 8th to close of $152.61 on May 9th with a high of $153.35.

On the close of May 9th, you could have sold the options on the bid for $4.8 for a profit in 1 day of  $1.80 or 58%.

Some of our subscribers held until expiration for it to get to the 100 day where it closed at $154.86 and the options could have been closed on the bid for $6.60.  This was a profit of $3.50 on a $3.10 investment for a 112% ROI.