Commodities are notoriously cyclical. We have long waves of investment … followed by long waves of disinvestment.
Right now, we are on the disinvestment part of the cycle. And any company dealing at all with commodities is having a tough time.
Problem is, things are set to get worse before they get any better. And that’s going to really chip away at the share prices of even the strongest commodity companies in the world.
That’s why today I want you to buy a put option on Caterpillar, Inc. (NYSE: CAT), the manufacturer of construction and mining equipment, engines, turbines and locomotives.
This company is set to see sales keep declining into next year as more commodity producers go bust or downsize, or just outright halt their operations.
So here’s what I want you to do:
Action to take: Buy to open the CAT May 2016 $70 put option (CAT160520P00070000) currently trading for $5.30 a contract. Don’t chase it past $5.60.
If CAT can fall to $57 a share before May 2016, you could double your money.
If you do not know how to make this trade yourself, call your broker and ask.
You should receive a confirmation within one to two hours after your order is made. If you do not receive this confirmation, let your broker know.
Finally, if you have any questions about this trade, simply send an email to firstname.lastname@example.org with a subject line of “SI Option Question” so that we can give you an answer immediately.
Charles Del Valle
Editor, Strategic Investment