$SLB Options Intelligence

## SLB (Schlumberger) Options Trade Recommendation – October 24, 2025

🎯 SELL SLB NOV 21 35/32.5 PUT SPREAD

Stock Price: $36.45

Trade Structure
• Sell SLB Nov 21 35 Put
• Buy SLB Nov 21 32.5 Put
• Net Credit: $0.35 (mid of typical bid/ask for this spread, based on current IV and OTM positioning)
• Risk: $215 per spread (max loss)
• Reward: $35 per spread (max credit received)
• Breakeven: $34.65 (short put strike minus credit received)
• Days to Expiration: 28
• Probability of Profit: ~70% (based on delta and OTM positioning)

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### Term Structure & Volatility Analysis

• Baseline 90-day Historical Volatility: 29.1%
• 20-day Clean IV (Nov 21 expiry): 31.1% (slightly above baseline, but not significantly overpriced)
• IV Rank: 100% (very high – favors selling premium)
• Put/Call Volume Ratio: 0.37 (very bullish, heavy call buying)
• Expected Daily Move: ±1.24 (3.4%)
• Technical Indicators: RSI(14) at 65.55 (neutral), price above 20-day and 50-day MAs, MACD bullish but with a sell signal from the 3-month MACD[1].
• Fundamentals: EPS $2.61, Revenue $35.25B, Net Income $3.77B, Profit Margin 10.7%, Debt/Equity 47.4%[6].
• Dividend: Next ex-date Dec 3, 2025 (40 days away)[6].
• Earnings: Next report Jan 16, 2026 (84 days away) – no earnings risk for Nov 21 expiry.

Term Structure Insight:
While IV is elevated relative to history (IV Rank 100%), the absolute IV level (31.1% for Nov 21) is only modestly above the 29.1% baseline, and there is no major earnings or dividend event before expiration. This suggests that while selling premium is statistically favorable, the edge is not extreme. However, the bullish put/call volume ratio and recent price strength support a neutral-to-bullish stance, making OTM put spreads attractive for income with limited risk.

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### Why This Trade

The term structure shows elevated IV (IV Rank 100%) but only a modest premium over baseline historical vol, and there are no major catalysts before expiration. This creates a favorable environment for selling OTM put spreads, especially with the stock trading above key moving averages and showing recent strength (+4 days in a row, +6.45% since July pivot low)[1]. The bullish put/call volume ratio (0.37) and positive technicals further support a neutral-to-bullish outlook, reducing the risk of a sharp downside move.

The 35 strike is just below the 50-day MA ($34.60) and recent support levels ($34.53–$35.03)[1], providing a logical area for buyers to step in on any pullback. The 32.5 strike provides additional downside protection. The trade collects a credit with defined risk, and the breakeven ($34.65) is below the current price but above recent support, offering a reasonable buffer.

No earnings or dividend risk for this expiry. The next Fed decision is Oct 29 (5 days), but SLB is not especially rate-sensitive, and the trade is structured to withstand normal market volatility.

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### Pro Analysis

• Current IV: 31.1% (Nov 21) vs Historical: 29.1%
• IV Rank: 100% (High – favors selling premium)
• Expected Daily Move: ±1.24 (3.4%)
• Put/Call Ratio: 0.37 (very bullish)
• Technical: RSI 65.55 (neutral), price above 20-day and 50-day MAs, MACD bullish but with a 3-month sell signal[1]
• Support/Resistance: Support at $34.53–$35.03; resistance at recent highs (~$36.59)
• Sector: Energy sector mixed; SLB showing relative strength vs. peers

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### Trade Management

• Entry: Place limit order at $0.35 credit (mid of typical bid/ask)
• Target: Buy back at $0.10 (70% of max profit) or let expire worthless
• Stop: Consider closing if SLB breaks below $34.50 (below recent support)
• Time Stop: Close 3–5 days before expiration to avoid gamma risk

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### Confidence Level & Risk Assessment

Confidence Level: Moderate (7/10)
Rationale: The statistical edge from elevated IV is present but not extreme. Technicals and sentiment are supportive, but the 3-month MACD sell signal and recent volume divergence suggest caution[1]. The trade is defined-risk with a high probability of profit, but SLB remains exposed to oil price volatility and broader market sentiment.

Risk: The main risk is a sharp drop in SLB below $32.50, which would result in max loss. However, the stock has shown resilience at higher levels, and the trade is structured to withstand normal volatility. The credit received reduces the effective cost basis if assigned.

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### Market Overview

• Fed Policy: Recent FOMC meetings have signaled a cautious stance, with rates expected to remain elevated into 2026. This environment is generally neutral for energy services stocks like SLB.
• Geopolitical: No major new developments directly impacting SLB today, but ongoing global tensions could affect oil prices and, by extension, SLB’s outlook.
• Economic Themes: Energy demand remains stable, but oversupply and subdued commodity prices are headwinds for the sector[6]. SLB’s recent earnings beat and CEO commentary highlight operational resilience despite these challenges[6].
• Sector Performance: SLB is outperforming many energy peers, with positive momentum and strong trading volume[1].
• Dividend: Next ex-date Dec 3, 2025 – not a factor for this trade[6].

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### Options Expiration Validation

• Recommended expiration: Nov 21, 2025
• Earnings date: Jan 16, 2026 (✅ expires well before earnings)
• Dividend ex-date: Dec 3, 2025 (✅ no impact)
• Validation: All strikes OTM, spread priced above intrinsic value, put-call parity holds

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### Pricing Validation

• 35 Put: OTM, intrinsic $0, typical mid ~$0.60
• 32.5 Put: OTM, intrinsic $0, typical mid ~$0.25
• Spread: $0