Options Playbook Ep. 462 — Exploring #CAT and #COP (Rerun)
This episode is a rerun of an earlier Brian Overby session managing two live trades — one in Caterpillar, one in ConocoPhillips — and it holds up well as a rewatch precisely because both trades were still developing when it first aired. Caterpillar had just reported a strong quarter, and Brian spends real time unpacking why the initial post-earnings selloff didn’t make much sense to him: concerns about data center construction slowing down, when in reality Caterpillar’s own results confirmed that buildout was still very much underway. He draws a useful contrast with Apple, whose stock got hit despite good earnings because of chip supply issues, versus Caterpillar’s polar-opposite pattern — a strong pre-earnings run, a post-earnings dip, and then a bounce back once the fundamentals reasserted themselves.
On the trade itself, Brian is managing an open-wing butterfly built around the 850/880 strikes that he’d put on ahead of earnings for roughly $5 to $6. With Caterpillar trading near $890 — right around the expected move he’d been targeting — the position has more than tripled in value, and he walks through the decision he’s weighing in real time: take profits on part of the position now, or let it ride toward the maximum payout if the stock holds above $895. His answer is a hybrid: close one contract to lock in gains, leave a working order on the second, and layer in a fresh, more speculative butterfly further out using the same expiration to keep pressing the position while implied volatility is still elevated.
The second half of the episode shifts to ConocoPhillips, heading into its own earnings report the next morning. With oil prices soft and the stock already down more than two percent on the day, Brian opts for a shorter-dated, higher-probability trade rather than adding to his existing long call spread: a put credit spread nine days out, selling the 114 strike and buying the 110 for protection, bringing in a net credit of roughly $1.35. It’s a lower-drama way to collect premium heading into a catalyst — the trade profits even if the stock just holds flat or drifts modestly higher, rather than needing a specific directional move to pay off.
Watching this as a rerun, what stands out is less the specific strikes — most of which have long since expired — and more the process Brian models: layering in speculative positions when volatility is rich, taking partial profits instead of an all-or-nothing exit, and reaching for defined-risk, income-oriented structures like credit spreads when a name is heading into a binary event but the setup doesn’t call for a big directional bet. That’s a mindset that travels well beyond Caterpillar and ConocoPhillips, which is probably why Tradier brought this one back for another airing.
One more thing worth flagging for the site team: because this is a confirmed rerun rather than new material, it likely shouldn’t get its own fresh publish date or count as a new episode in any weekly rollup — the original Ep. 457 already covers this ground.
