Caterpillar has been trying to advance, but one investor remains nervous.
optionMONSTER’s Depth Charge tracking program detected the purchase of 11,945 January 85 puts for $1.23 and the sale of an equal number of January 95 calls for $0.46. Volume exceeded open interest at both strikes, indicating that new positions were initiated in each.
The investor paid $0.77 to open the trade and will make money if the maker of earth-moving equipment declines over the next five weeks. He or she probably owns shares in the company and is using the options as a hedge in a collar strategy.
— Option Monster