May 30, 2018 - MDT Alert (APA)

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I am going to make another suggestion on APA. The last time we traded APA,?it was with a bearish bias based on the XLE hitting against strong resistance.

APA, along with most oil stocks are making some strong moves today.

This trade is biased to the upside, with an expectation that APA will continue to follow through to the upside.

APA is trading around $40.19 as I write this.

I am going to suggest an uneven straddle.

I suggest going out the July expiration. This gives us about one month for the stock to make a move.

Buy to Open (8) July $40.00 call @ $2.10

Buy to Open (4) July $40.00 put @ $1.90

As you can see, we are doubling up on the longside.

The suggested trade size is for the nominal portfolio of $100,000 and in total works out to about a 2.4% risk.

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