Friday, April 15th, 2016

SLB Earnings Trade

SCHLUMBERGER, SLB is a main component of OIH the ETF. The stock is mild mover and has low volatility compared to the market and has been consolidating for the last 2-3 months. Earnings are due out 4/24/09 before market opens.

Here is a trade from famous, one and only Dan Sheridan, Master trader from Chicago’s CBOE. I owe a lot to Dan Sheridan, and his trading style has influenced my own thinking and helped me to learn and stay away from trouble over time. Dan Sheridan has spent 22 years in the pit and now he is conducting his own seminars.

Here is the trade I liked so much that I wanted to share with our readers. Its an IRON CONDOR strategy with almost one standard deviation out and with almost 2:1 risk to reward.


 

BUY MAY 55 CALLS
SELL MAY 50 CALLS = Net credit 0.90

BUY MAY 35  PUTS
SELL MAY 40 PUTS = Net credit 0.55 Total credits= 1.45 Risk/ Margin= 3.55

Break even 38.8 and 51.9 If SLB stays with this range upon expiration.

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