Market News

October 17, 2016  Mon 8:22 AM CT

Schlumberger reports earnings this week, and one investor is betting that on more upside next year.

optionMONSTER's monitoring system detected the sale of 1,500 January 82.50 calls for $3.15 and the purchase of 2,000 June 85 calls for $4.28 on Friday. Volume was below open interest in the January contracts, indicating that a bullish position was rolled forward by five months to a higher strike and increased in size.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

SLB fell 0.26 percent to $81.32 on Friday but is up 7 percent in the last month. The oilfield-services company is scheduled to announce quarterly results after the close on Thursday.

Overall option volume was about average in SLB on Friday, but calls outnumbered puts by a narrow margin.

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Four-Part Edition: Cash-Secured Puts, Covered Calls, Stock Replacement Calls, and Protective Puts

We are finishing this year's editions of Advantage Point Newsletters with a "best of" review of the simple options strategies that should be the basic foundation for any investor.

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