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| Delta Interval Research Note |
CYCLES RESEARCH |
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1 - Baker Hughes Inc. (BHI) Cycles Report
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- cycle length duration: 35 days,
- cycle amount of dollar change: $23.55,
- often a cycle ends with a high daily trading volume,
- pointing to the cycle end: look for above avg. daily trading range.
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| 2 - Price Behavior Graph |
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3 - Options Trade
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We have observed a substantial move upwards over the past month. The technical indicators point to stock being much overbought. The value increase of $23 dollars represents a 35% rise of BHI stock price since the positive cycle started on March 21.
We buy 1 contract of Jun-06 BHI 85 and/or 1 contract of Jul-06 BHI 90 options straddle.
One of them should win. This means we are indifferent to the direction of the stocks move, even though there is
a high chance of a correction downward. We monitor our directional risk by delta and our time
exposure risk by theta. The market fluctuates and offers an opportunity to achieve a target of
monthly +5% to +10% return per trade. (learn more) |
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