Mike Khouw Sees Unusual Options Activity In Caterpillar Inc. - Caterpillar (NYSE:CAT)

27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.

On CNBC's Options Action, Mike Khouw spoke about options activity in

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Caterpillar Inc. (NYSE: CAT). He said that the options volume was 4 times higher than the average daily options volume and he noticed that traders were making some bearish bets. They were buying the July 75 puts for $0.40. For the trade to be profitable Caterpillar Inc.

has to drop to $74.60 or 3 percent lower by next Friday. Khouw thinks that this is an inexpensive way to make a bearish bet as he believes that Caterpillar Inc. could easily decline 3 percent in such a short period.