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Investor's Business Daily

Investor's Business Daily

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Business & Economics

As Caterpillar Digs Itself Into A Hole, Option Trade Offers A Way To Profit

Investor's Business Daily
Summary
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62% Informative

Caterpillar ( CAT ) looks like a potential bearish candidate after breaking below the 200-day moving average Wednesday .

A bear call spread involves selling an out-of-the-money call and buying a further call.

The strategy can be profitable if the stock trades lower, sideways.

The spread will achieve the maximum profit if Caterpillar closes below 380 on March 21 .

VR Score

41

Informative language

27

Neutral language

58

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semi-formal

Language

English

Language complexity

31

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not hateful

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medium-lived

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