Rolling the Dice on Oil

Halliburton HAL – NYSE

Wednesday, March 15, 2017

After many fingers pointed to oil-related equities as the root cause of the recent stock market sell-off, oil shored up and mounted a brisk recovery. Seizing the moment, a trader went after Halliburton HAL – NYSE today, purchasing 25,000 HAL March 52 calls for $0.25 apiece.

HAL

This trade cost $625,000, and given a break-even price at expiration of $52.25, HAL needs to increase just 1.4% for it to pay off. That’s a piddly percentage, but these options expire this Friday.

If oil’s snapback stalls even for just a few days, this trader will lose everything. But if oil keeps gushing, he’ll make $2.5 million for every $1 HAL rises above $52.25.

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