{"id":8,"date":"2010-04-19T20:11:11","date_gmt":"2010-04-19T20:11:11","guid":{"rendered":"http:\/\/www.cheapiv.com\/?p=8"},"modified":"2010-04-20T19:35:27","modified_gmt":"2010-04-20T19:35:27","slug":"oih-oil-service-holders","status":"publish","type":"post","link":"http:\/\/www.cheapiv.com\/?p=8","title":{"rendered":"OIH-Oil Service Holders"},"content":{"rendered":"

\"OIH<\/a><\/p>\n

4\/19\/2010<\/p>\n

OIH – Oil Service Holders<\/p>\n

With the volcanic ash from Iceland causing major problems for the last week OIH has dropped\u00c2\u00a0 from a high of $129.18 to a low of $123.43 but has managed to close above a 38% retracement level of $124.53.\u00c2\u00a0 This is the second time that it has bounced from this area.\u00c2\u00a0 Implied Volatility could be an interesting play here.\u00c2\u00a0 The ETF price is a little expensive around $125, and the option at the money straddle is currently (May) is currently trading at $7.8.\u00c2\u00a0 Considering that in the last 3 days OIH has moved almost $6, we don’t expect too much expansion outside of this range.\u00c2\u00a0 If the the airlines remain grounded then we may see further pressure from low demand, higher inventory, thus driving down oil prices.\u00c2\u00a0 Most likely we will see things try to get back to some normalcy as the winds shift.\u00c2\u00a0 This may cause a spike in oil with the “business demand” coming back online.\u00c2\u00a0 If oil futures do move outside of the range, buying volatility at the top of an explosive chart is always a goo thing.\u00c2\u00a0 OIH has had trouble staying above $130 in Oct09 and Jan10(high of $134.45).\u00c2\u00a0 These two sell offs both caused a spike higher in implied volatility.\u00c2\u00a0 Any inventory shock will cause higher prices that will most likely drive OIH higher as well.\u00c2\u00a0 We are choosing to trade this one aggressively with gamma trading.\u00c2\u00a0 As the stock moves higher within the range we will sell some stock against it.\u00c2\u00a0 As is moves lower we will buy some against the position.\u00c2\u00a0 This flipping will allow us to offset and hopefully profit for the next two weeks.\u00c2\u00a0 We will look to exit at profitable areas on either\u00c2\u00a0 a spike of either side or volatility pop from news or a move.<\/p>\n

[private_free]<\/p>\n

Update: 4\/20\/2010<\/strong><\/p>\n

OIH gapped higher and hasn’t looked back.\u00c2\u00a0 The ATM Straddle that I bought yesterday has expanded to $9.23 on the bid with the OIH trading at $130.63 at 11:17am.\u00c2\u00a0 I am getting out of the straddle here for a quick profit.\u00c2\u00a0 Locking in $1.43 or 18% profit in a matter of a few hours is something that you have to do. <\/strong> I have other positions in the oil sector that will continue to profit to the upside.[\/private_free]<\/p>\n

To see how I traded it, please register below:<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

4\/19\/2010 OIH – Oil Service Holders With the volcanic ash from Iceland causing major problems for the last week OIH has dropped\u00c2\u00a0 from a high of $129.18 to a low of $123.43 but has managed to close above a 38% retracement level of $124.53.\u00c2\u00a0 This is the second time that it has bounced from this […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-8","post","type-post","status-publish","format-standard","hentry","category-cheap-iv"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts\/8","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8"}],"version-history":[{"count":0,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts\/8\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}