RIG, SLB, and Pure Option Straddles
Sharp: I had forgotten about RIG. Thanks for adding that one to the mix. Perhaps Alex can chime in about the current timing for another short on RIG since he's more familiar with trading that particular equity?
Regarding SLoB, regardless of the F/A, it's severely oversold, and it's ripe for a rebound purely based on psychology and sentiment. This is a long time general in the OSX. It's leadership cannot remain suppressed for long, and it will eventually return to a premium multiple... probably in less than 3 months, IMO.
With a pure option straddle on a single equity (i.e., SLB), you can only win on one side of the straddle, but your downside is limited on the other side to the purchase price of the option. Since I won't be in town and at my computer much of next week, I was focusing on a common stock straddle simply to minimize my trading risk, even though one leg of the straddle would be a naked short (but with a stop loss). Plus, I was focused on picking a pair of different equities that could give me two potential wins or losses instead of one, but with the odds significantly in favor of the wins.
Razor |
