Apache Corporation Is Ready For Battle

Chinese stocks started the week in negative territory, with the Shanghai Composite falling 1.30% on the next round of tariff threats in the escalating Sino-U.S. trade war. Considering still-tight liquidity, the benchmark index could fall below 2,638 points, seen as a key psychological level since early 2016. Over the weekend, China accused the U.S. of blackmail and said its most recent retaliatory tariffs on $60B of U.S. goods showed rational restraint.

We had a nice Inside Bar entry trigger in Apache Corporation (ticker: APA).  The trigger price was at $45.64.

We signaled the August monthly expiration 46.5/48 call spread, buying it for $0.40.  Our maximum risk is the premium paid ($0.40).  Our maximum reward is the width of the spread less the premium paid or $1.10.  This gives us a reward to risk ratio of 2.75:1.