On Friday’s Options Action, the crew analyzed the performance of energy stocks. Oil services companies have recently underperformed the energy sector this past year and has reached oversold levels. Coupled with reaching multi-year lows around $23 support suggests a possible bounce higher. Expecting a checkback towards trendlines Michael Khouw suggests buying an Oct 21/23/25 Call Risk Reversal for a $0.50 Debit. As of Friday’s close, this spread is trading at $0.55.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: OIH Options Action