Stock / Symbol: [private_monthly] Halliburton / HAL [/private_monthly]
Price at this post: $38.56
Option Strategy: diagonal call spread
Max Risk: $935
Max Profit: @ $120 or 12.8% @ $39 by Nov exp
Profit Range: $37.50 - $48 by Nov exp
Uncalled Return: 8.8%
Suggested Stop @: $27
Reasoning: [private_monthly]HAL[/private_monthly] is a major player in the exploration, development, and production of oil and gas properties worldwide. With strong fundamentals, and with the stock trading 34% under it's July highs, we feel this company has significant upside potential. We're trading this one using a diagonal call spread, giving us a breakeven under it's current price and a maximum yield at $39 (just 2.6% higher). This trade structure gives us a 60% probability of success by Nov 18. If [private_monthly]HAL[/private_monthly] is trading under $39 by next Friday, we'll have taken in an uncalled return of nearly 9% and will have the choice of writing weekly or monthly near term calls to further lower our cost.
Trade Details:
[private_monthly]
BTO 1 HAL Apr12 30 call
STO -1 HAL Nov11 39 call
for a net debit of $9.35 per contract (GTC, limit order)
Requirements:
Cost/Proceeds $935.00
Option Requirement $0.00
Total Requirements $935.00
Estimated Commission $12.95
[/private_monthly]
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