Apples & Oil
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home | Options Trading Archive | Apples & Oil

Apples & Oil

Henry Gambell
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Here we are again on the third Friday of the month and options expiration is looming ahead. We have a short trading week after the markets being closed on Monday and Apple's recent announcement of Steve Job's leave of absence plus a slew of earnings this week should add a good deal of volatility to the market. The Nasdaq took the blunt of Apple's drop this morning but was able to rebound nicely, pushing a few ticks above Friday's high. I'm now watching our daily and weekly pivots in the index, $2300.67 & 2301.25 respectively.

So if you weren't brave enough to step in and buy Apple this morning, what's another market to be in? As noted in today's Big Idea, I like the idea of being long and short this market. I'm going to focus on taking the best setups in each and make sure I have my risk set appropriately for each trade. Currently Schlumberger Limited is in a long Squeeze and is a stock I see getting ready to pop through its most recent highs. Schlumberger supplies the oil and gas industry with technology solutions and integrated project management, lining up nicely with my fundamental long analysis in the crude oil market. The company will report earnings on January 21st, just three days away, so I will want to have some cushion in the trade if I'm to hold through the report. Keep in mind, with this being a directional only play I'll be moving out into February options. Wednesday through Friday will be the only days I play January options and these plays will be initiated with a bias towards pinning.

Trade described:  BTO FEB 85 SLB Calls For $3.70

Positions at time of publication: Long SLB Calls

 Symbol SLB
 Action (Buy to open/Buy to close/Sell to open/Sell to Close) BTO
 No. of contracts (where applicable) 1
 Expiration month FEB
 Strike price 85
 Type (Stock/Call/Put) Call
 Trade price $3.70
 Spread (better than/none) xxxxxxxxxxxxxxxx
 Position? Long Calls
 Chart Source? TS & TOS
 Stop $82.55
 Target $90.15

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