Caterpillar (CAT) is approaching overbought levels rarely seen, along with implied volatility readings in the lower 10% percentile. I like this combination of expensive stock and cheap options, so let’s jump in and take a short term counter-trend bearish put diagonal position.
Buy to open CAT December 92.50 puts (expire 12/16/16)
Sell to open CAT November 90 puts (expire 11/18/16)
2.15 net debit