Stock / Symbol: Nabors Industries / NBR
Price at trade post: $16.60
Option Strategy: [private_monthly]calendar call spread[/private_monthly]
Reasoning:[private_monthly] With solid fundamentals and with NBR trading at the low end of it's trading range, we're putting on a trade that bets NBR will be trading back at around $18 by May expiration. With a break even of $16 on the trade, the stock can pull back 3.5% and still be profitable by May 18th. While the trade can return as much as 91% in just under 7 weeks, we'll look to exit once the trade is up about 20%. We're not recommending a downside stop at this point as we should be able to adjust this trade as necessary by adding a 17 strike calendar to the trade should the stock pullback below 16.[/private_monthly]
Trade Details:
[private_monthly]
BTO 5 NBR Sep12 18 calls
STO -5 NBR May12 18 calls
for a net debit of $0.93 per contract (GTC, limit order. don't pay more than $0.94 for the spread)
Requirements:
Cost/Proceeds $465.00
Option Requirement $0.00
Total Requirements $465.00
Estimated Commission $12.95
Max Risk: $465
Max Reward: $425 or 91% by May 18
Profit Range: $16.00 to $20.70 + by May 18
Suggested Upside Stop @: $19.25
[/private_monthly]
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