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dzonefx
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Number of messages : 476
Points : 2970
Date of Entry : 2013-01-29
Year : 47
Residence Country : Beograd

Marathon Oil Corporation (MRO)

on Thu Mar 02, 2017 7:32 pm
Marathon Oil Corporation (MRO), $16.45


Trade:   Over $16.65, we recommend buying 1,000 shares of stock and selling 10 Apr $18 calls (50 DTE) calls at mid-point (currently $.35 x .37, but will be higher when trade triggered).  Note:  Earnings 5/17.

Technical Setup:  See monthly chart but pull back into Bullish Wide Range Bar after bottoming pattern.  We will look to sell shorter-term calls against it over time (i.e., Bullish Diagonal) to reduce cost basis.
Option Strategy:   Covered Call.  Defined as Long Stock + Short Call (1 contract for every 100 shares).  Premium received lowers cost basis because selling Extrinsic Value (time decay).  Done to take in money (Premium) which increases probability of profit.  Since capping gains, considered a Mildly Bullish directional trade.

Target:   $25 area.
Max Loss:  Debit
Stop Loss:  $15.18.

source: mastertrader
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