XTO Energy (XTO) - I always use XTO as a proxy for natural gas. Usually natural gas rises into the summertime. It is breaking out above the 50 period moving average.
I think a good strategy for this play is to sell the AUG32 PUTS and buy the AUG35 CALLS. This trade will only cost you net $1.25 or so per contract. I don't mind owning XTO stock at $32 in a worse case scenario.
I will enter this trade today towards the close. I will keep you updated.
When XTO stock price gets to $39.00, close both positions for a nice gain.
Earnings May 6th.
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