Buy Alert: August 22, 2014

Buy Alert: August 22, 2014

 

Option Strategy:

Buy Penn Virginia (PVA) October 17, 2014 $15.00 calls for $0.90 or better.

 

Commodity Outlook: Crude Oil

With crude trading at $93 a barrel this morning, now’s the time to take low risk long trades in the oil patch. Here’s a great way to capitalize on a looming bounce in crude.

 

Resource Company: Penn Virginia (PVA)

Time is of the essence today. Somebody is loading up on PVA calls in today’s session. The October $14, $15, $16, and $17 strikes are very active.

This unusual options action tells me something is brewing with PVA. In case you’re unaware, PVA has extensive operations in the Eagle Ford shale of South Texas.

So here’s what we’ll do…

Buy the PVA October 17, 2014 $15.00 calls for $0.90 or better.

The current bid/ask spread for this contract is $0.75/$0.80.

Do not pay more than $0.90 per contract!

Our official entry price for performance tracking is $0.80. Your price may be higher or lower.

Exit Strategy:

Remember, we want PVA to trade higher. Our first profit target is $16. Given the incredible volume in the October calls, our second profit target at $18 is within reach as well.

The risk control price for this trade is $13.00. If PVA trades below that level, conservative investors should consider closing this trade to preserve capital.

 

Category: Commodity Trading