Options traders are blasting CAT
Dow Jones Industrial Average (DJI) components Caterpillar Inc. (NYSE:CAT) and Merck & Co Inc (NYSE:MRK) are moving in opposite directions today after their respective first-quarter earnings reports, as the blue-chip index eyes its worst single-day decline since March 2023.
Caterpillar stock is down 6.4% at $340.21 at last check, after the heavy equipment maker missed first-quarter revenue estimates and issued a weak current-quarter forecast. Shares fell to their lowest level since early February on the news, and are eyeing a close below the 60-day moving average for the first time since December. CAT remains up 15.1% this year, though.
Options traders are blasting the equity, with 17,000 calls and 20,000 puts traded so far, or double the intraday average volume. Most popular is the weekly 4/26 325-strike put, which expires at the close tomorrow.
Merck stock is faring much better, last seen up 3.3% at $131.18. The pharmaceutical giant bested top- and bottom-line expectations for the first quarter, and hiked its annual profit and revenue forecast to boot. The security earlier came just shy of its March 27, record high of $133.08, and sports a 20.2% year-to-date lead.
The equity also sports a Schaeffer's put/call open interest ratio (SOIR) 0.55 that ranks in the low 15th percentile of annual readings, meaning short-term options traders lean bullish.