SLB closed Friday at $122.18, and it seems to be at a higher probability long entry point (one week after my first assessment). Earnings 4/25, IV 31.3% (1 yr: 22-40, 3 mo: 27-40). I'll probably buy the Apr 110 calls (IV should go up pre-earnings). I'll size based on the underlying ~$4 stop loss, i.e. 3 contracts / $1,000 risk (delta .88). I'll exit earlier if price action doesn't confirm. Target ~$133-134 in 5-10 trading days. We'll see ...
[/QUOTE] c2 , are u sure about APR calls ? The 4/25 report date make it MAY expiration , why you want to buy APR options then ? Not so much pre-report IV run here ; currently at 30 will go to around 33-36 before report.
This SLB Apr 110 calls is a directional play. My time frame for this trade is: 5-6 days, up to 10. I don't expect IV to drop pre-earnings, so I'm ok with straight calls.
5 days from opening, this trade behaves well and I'm sticking to my trade plan. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1026192>
2 pm EST: closed SLB for $4,452.81 profit over 1 week (initial stop loss ~ $2,000). There's a high probability of short term retracement. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1028143>