Trade Alert - (CAT) July 26, 2024

When John identifies a strategic exit point, he will send you an alert with specific trade information on what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

Trade Alert - (CAT) – BUY

BUY the Caterpillar (CAT) August 2024 $310-$320 in-the-money vertical Bull Call debit spread at $8.50 or best

Opening Trade

7-26-2024

expiration date: August 16, 2024

Portfolio weighting: 10%

Number of Contracts = 13 contracts

If you don’t do options, buy the stock. My target for (CAT) next year is $450, up 28%. I expect (CAT) to hit a new all-time high in 2024.

If you are looking for a great play on falling interest rates you can’t do any better than heavy equipment maker Caterpillar. I have been following this company for 50 years.

They have great exposure to the housing market which will benefit greatly from falling mortgage rates. They have a factory in China that benefits from construction there.

I am therefore buying the Caterpillar (CAT) August 2024 $310-$320 in-the-money vertical Bull Call debit spread at $8.50 or best.

Don’t pay more than $9.20 or you’ll be chasing.

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

Simply enter your limit order, wait five minutes, and if you don’t get done cancel your order and increase your bid by 10 cents with a second order.

This is a bet that Caterpillar (CAT) will not fall below $320 by the August 16 option expiration day in 15 trading days. For more about (CAT) please click here for their website.

Here are the specific trades you need to execute this position:

Buy 13 August 2024 (CAT) $310 calls at………….………$44.00

Sell short 13 August 2024 (CAT) $320 calls at………....$35.50

Net Cost:……………………..…….………..………….…............$8.50

Potential Profit: $10.00 - $8.50 = $1.50

(13 X 100 X $1.50) = $1,950 or 17.64% in 15 trading days.

If you are uncertain about how to execute a bear put options spread, please watch my training video by clicking here.

The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep-in-the-money spread trades can be enormous.

Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.

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