Sign in to comment!


Options Trading

TradeKing Midday Market Call Recap - SPX, OXY

Recap for Tuesday, August 19th by Kevin Corrigan
Did you miss Tuesday’s TradeKing Midday Market Call? Here’s a quick recap. Don’t miss another session, register  here today!

Analysis of S&P 500 from  QuickTakesPro’s  Michael Kahn -

S&P 500 (SPX) – At the time of this broadcast, SPX was around 1,979.26 up 7.52 today. The upward trendline going back to November 2012 is still intact. It had a recent bounce off this trendline, which is a sign of strength. It can no longer be considered in a correction according to the chart. It is now above support levels, and from a technical analysis perspective, there is no clear indicator before the old highs. Summating the chart, Michael warned, “You gotta go with the flow at this point, but there could be some resistance coming up ahead.” 

It is back above its 50 day moving average of 1958.05 and its 200 day moving average of 1869.58.

The Chart of the Day is Occidental Petroleum. (OXY) - At the time of this broadcast, OXY was at 101.82 up 1.22 today. It’s been in a giant rising channel going back to November 2012. It broke down and recovered at around the 99 level, even as the oil sector has been struggling. It is above its 50 and 200 day moving averages of 101.03 and 96.38, respectively.
It could return to recent highs near 105 if it continues in this rising channel, according to Michael.

Analysis of OXY Volatility Chart and Dividends from TradeKing’s Brian Overby
Both the 30-day implied and historical volatility levels have dropped near year lows after its recent earnings announcement. The 30 day historical is about 17.5%, while the 30 day implied is near 15%.  
It does have a significant dividend (73 cents/share) and is due to go ex-dividend on September 8th. This will affect option contract prices that expire after that date. 

Technical Tools Used:

Moving Averages

- Trendlines

Brian Overby’s paper trade strategies based on Michael’s analysis - 

Michael's analysis is bullish. Brian discusses two strategies, a shorter term Long Call Spread that is more aggressive (the expiration is before the ex-dividend date) and a more conservative Short Put Spread that expires after. 


Brian’s Paper Trade - Long Call Spread 

 - Buy 1 Sep 5 2014 OXY 100 Call

- Sell 1 Sep 5 2014 OXY 104 Call

- 17 Days to expiration

- Net Bid 1.94, Mid 2.00, Ask 2.07 for the Spread 

- Net Debit is $2.00, if we execute at the Mid (might not be possible).

- Maximum potential loss: $2.00

- Maximum potential gain is $2.00

Total commission to enter this trade is $6.25

Brian’s Paper Trade - Short Put Spread 


- Sell 1 Sep 26 2014 OXY 101 Put

- Buy 1 Sep 26 2014 OXY 99  Put

- 38 Days to expiration

- Net Bid 0.67, Mid 0.76, Ask 0.84 for the spread

- Net Credit is $0.76, if we execute at the Mid (might not be possible).

- Maximum potential loss: $1.24 

- Maximum potential gain is $0.76

Total commission to enter this trade is $6.25


**NOTE: option prices are given as a per contract amount. Multiply loss and gain figures by 100 shares and by the number of contracts traded to determine the amount of the full potential loss or full potential gain. No additional calculations are needed to determine commission costs.

TradeKing Options Tools used:

- Detailed Quote

- TradeKing Long Call Spread

- TradeKing Short Put Spread

- TradeKing Volatility Charts

- TradeKing Options Pricing Calculator
- TradeKing P&L Calculator

Get solid market analysis and potential trading ideas. Take 15 minutes of your lunch with our team, as they analyze the market during this live online session. As an added bonus, a stock chart will be covered in detail each session accompanied by a potential option trade. This might be the most valuable thing you do all week! Every Tuesday midday from 12:00 - 12:15pm ET.

Don’t miss the next TradeKing Midday Market Call. Register here:

Regards,Kevin Corrigan, PMPVP Content and Social Media
Options involve risks and are not suitable for all investors. Prior to buying or selling options, an investor must receive a copy of Characteristics and Risks of Standardized Options, sent to you in previous communication. Additional copies may be obtained by calling TRADEKING at 877-495-KING or by visiting

Multiple leg options strategies involve  additional risks and multiple commissions, and may result in complex tax treatments. Please consult a tax advisor.

At the time of publication and in the preceding month, TradeKing and/or Michael Kahn did not have ownership greater than 1% in any stocks mentioned; did not have any other actual, material conflict of interest known at the time of publication; have not received compensation from a public offering nor from investment banking services related to any companies mentioned within the past 12 months, nor expect to receive any in the next 3 months; nor engaged in market making in the securities mentioned.
System response and access times may vary due to market conditions, system performance, and other factors.

Michael Kahn maintains a business relationship with TradeKing.

Any strategies discussed and examples using actual securities and price data are strictly for illustrative and educational purposes only and are not to be construed as an endorsement, recommendation, or solicitation to buy or sell securities. Past performance is not a guarantee of future results. Consider the following when making an investment decision: your financial situation, your risk profile and transaction costs.
Market timing is a complex investment strategy which involves risk and may incur additional commission costs.
While implied volatility represents the consensus of the marketplace as to the future level of stock price volatility, there is no guarantee that this forecast will be correct.
TradeKing charges $4.95 for online equity and option trades, add 65 cents per option contract. TradeKing charges an additional $0.35 per contract on certain index products where the exchange charges fees. See our FAQ for details. TradeKing adds $0.01 per share on the entire order for stocks priced less than $2.00. See our  Commissions + Fees page for commissions on broker-assisted trades, low-priced stocks, option spreads, and other securities.
The projections or other information generated by TradeKing's tools regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. The calculations do not take into consideration all costs, such as commissions and margin interest which may impact the results shown. It is the user's sole responsibility to select the criteria to enter in the TradeKing's tools, or to choose among the pre-defined screens, and to evaluate the merits and risks associated with the use of the tools before making any investment decisions. TradeKing is not responsible for any losses that occur from such investment decisions.
TradeKing Webinars and All-Star Blogs are provided for educational and informational purposes only.

All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. TradeKing provides self-directed investors with discount brokerage services, and does not make recommendations or offer investment, financial, legal or tax advice. You alone are responsible for evaluating the merits and risks associated with the use of TradeKing's systems, services or products.
TradeKing selects and defines as All-Stars certain independent market commentators who are recognized industry personalities and experienced traders and who provide timely market commentary via the TradeKing All-Star Blog and/or TradeKing Webinars. Each All-Star commentator's bio, related qualifications and disclosure as to their relationship with TradeKing can be found on the All-Star Roster. The selection of All-Star commentators is solely based on the quality and style of the content provided. TradeKing does not measure, endorse, or monitor the performance or correctness of any statement or recommendation made by independent All-Stars commentators. Supporting documentation for any claims made by TradeKing All-Stars will be supplied upon request by the author of the post, who is solely responsible for the views expressed. Contact TradeKing All-Stars by sending an email message to
(c) 2014 TradeKing Group, Inc. All rights reserved.

Securities offered through TradeKing, LLC, member  FINRA and  SIPC