Best Stock on the Market

Call Options on APC on 8/17/2012

Anadarko Petroleum has ventured beyond its original area of operation -- the Anadarko Basin -- to explore for, develop, produce, and market oil, natural gas, natural gas liquids, and related products worldwide.

In 2011 the large independent company reported proved reserves (90% of which is located in the US) of 1.1 billion barrels of crude oil and NGLs and 8.4 trillion cu. ft. of natural gas. Additional assets include coal, trona (natural soda ash), and other minerals.

Anadarko operates a handful of gas-gathering systems in the Mid-Continent. Internationally, the company has substantial oil and gas interests in Algeria. It also has holdings in Brazil, China, Indonesia, Mazambique, and West Africa.

Stockwinners is bullish on this name for the following Reasons:

  1. Shares have formed a bullish symmetrical triangel and are going to break out of this formation
  2. Energy sector in general and Anadarko in particular have been lagging the recent rally and are now going to play catch up to the rest of the market
  3. With current situation in middle east and rising oil prices along side with increased demand due to seasonality facotrs , APC stock will only go higher from this point
  4. The $70 call is already in the money and allows us to participate in any upside move immediately
  5. The shares are currently trading at $70.30

Trade: Buy 1 Sep $70 call for less $ 3.00 than

Breakeven & profit/loss analysis

  • Breakeven at $73 by September expiration
  • Profits above $73, unlimited Max profit
  • Losses between $73 to $70, max loss of $3 below $70 by September expiration 

The payoff table is presented below:

Trade

  • Buy 1 September $70.00 Call at $3.00
  • For a net debit of $3.00

Profit/Loss Analysis

  • Breakeven at $73.00
  • Maximum profit is unbounded
  • Maximum loss is ($300.00) at strike of $70.00

Closing Summary

  • Sold 1 September $70.00 Call at $3.25

Position closed on 9/19/2012 at price of $3.25 with a 8.33% gain in 32 days.

Updates

9/19/2012 10:23:11 AM

Stockwinners is happy with the position and is closing out this position . please adjust your stop-loss if you still want to stay long.

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