Add IOC Puts
Balancing Out the Ledger
PLAY: Buy the IOC February 70 Puts (IOC NN) at or under $4.30, good for the day. Place a protective stop limit at $2.50 and a pre-determined sniper sell at $6.40.
Dear Bottarelli Research Member,
As I noted this morning, Interoil (IOC – NYSE) has had an incredible run, but it now looks like the stock is ready to take a breather.
As you probably know, IOC is an oil/gas exploration company with petroleum licenses covering 8.7 million net acres in Papua New Guinea. The biggest IOC supporter has been George Soros, who started buying the stock in the mid-teens (perhaps even lower). Now, it’s rumored that Soros would like to start taking some of his profits off the table. After all, as it stands today, the stock is valued entirely based on speculation that their land holdings contain significant oil reserves. Case in point, the stock trades at a ridiculous forward P/E ratio of 250.62.
Based on this situation, it’s clear that Soros is now thinking that his risk-versus-reward scenario is no longer skewed in his favor. With such a huge gain, Soros would be foolish not to lock in some profits. If he begins unloading some of his position, IOC could easily dip $5.00 to $10.00 very quickly. Therefore, let’s balance out our current ledger by adding IOC puts now!
PLAY: Buy the IOC February 70 Puts (IOC NN) at or under $4.30, good for the day. Place a protective stop limit at $2.50 and a pre-determined sniper sell at $6.40.
And as always…
Lock and load!
Sincerely,
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