Potential Schlumberger (SLB) Trade Has 4.74% Downside Protection

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Feb 11, 2013 (Marketintelligencecenter.com via COMTEX) -- Schlumberger Ltd (NYSE:SLB) closed Friday's trading session at $79.07. In the past year, the stock has hit a 52-week low of $59.12 and 52-week high of $80.78. Schlumberger (SLB) stock has been showing support around $77.82 and resistance in the $79.70 range. Technical indicators for the stock are Bullish and S&P gives Schlumberger (SLB) a neutral 3 STARS (out of 5) hold rating. For a hedged play on Schlumberger (SLB), look at the Apr '13 $77.50 covered call for a net debit in the $75.32 area. That is also the break-even stock price for this trade. This covered call has a duration of 68 days, provides 4.74% downside protection and an assigned return rate of 2.89% for an annualized return rate of 15.54% (for comparison purposes only). A lower-cost hedged play for Schlumberger (SLB) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Schlumberger (SLB) Jan '14 $50.00 call and selling the Apr '13 $77.50 call for a total debit of $25.60. The trade has a lifespan of 68 days and would provide 4.39% downside protection and an assigned return rate of 7.42% for an annualized return rate of 40% (for comparison purposes only). Schlumberger (SLB) has a current annual dividend yield of 1.40%.


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As of Thursday, 02-07-2013 23:59, the latest Comtex SmarTrendA? Alert,
an automated pattern recognition system, indicated a DOWNTREND on
05-07-2012 for SLB @ $70.23.

For more information on SmarTrend, contact your market data
provider or go to www.mysmartrend.com

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