$SLB Options Intelligence

🎯 SELL SLB DEC 05 35 PUT, BUY SLB DEC 05 33 PUT (Bull Put Spread)

I recommend a bull put spread because the current term structure shows elevated implied volatility (IV) above historical baseline, favoring premium selling strategies, and technicals indicate a bullish trend with price above all major moving averages. SLB’s next earnings is on January 16, 2026, so December 5 expiry is safely before earnings, allowing capture of time decay and IV contraction without earnings risk. The stock trades at $37.43, well above the 35 strike, giving a strong probability that the 35 put will expire worthless.

Trade Details:
• Sell SLB Dec 05 35 Put at approx. $1.10 (bid)
• Buy SLB Dec 05 33 Put at approx. $0.45 (ask)
• Net Credit: ~$0.65 per share ($65 per spread)

Stock Price: $37.43

📊 Trade Metrics

• Max Profit: $65 (net credit received)
• Max Risk: $135 (difference between strikes $2.00 - credit $0.65)
• Breakeven at Expiration: $34.35 (35 strike - $0.65 credit)
• Probability of Profit: High (stock > 35 now, strong technical support)
• Days to Expiration: 23 (Nov 12 to Dec 5)

📈 Term Structure & Volatility Analysis

• Baseline 90-day historical volatility: 28.0%
• December 5 Clean IV: ~33.9% (above baseline, indicating premium is rich and favorable for selling)
• Current IV Rank: 100% (very high, strong signal to sell premium)
• Expected daily move: ±$0.96 (2.57%)
• Put/Call Volume Ratio: 0.34 (bullish, more call buying but puts still liquid)
• Market Maker Max Pain: $35 (aligns with short put strike, supporting price stability here)

📈 Technical & Fundamental Context

• SLB trades above its 20-day ($35.76), 50-day ($35.03), and 200-day ($36.14) moving averages, indicating bullish momentum.
• RSI at 63.5 is neutral to mildly bullish, no overbought signals.
• Schlumberger has strong analyst support with multiple buy/strong buy ratings and price targets between $44-$48.
• Dividend yield of 3.05% supports total return for holders.
• Recent market intelligence highlights positive catalysts like AI integration (Tela™ launch) and business restructuring, supporting medium-term growth.

🎯 Why This Trade

The term structure reveals an elevated IV environment (Clean IV ~33.9% vs baseline 28%), favoring selling premium. The bull put spread at 35/33 offers a defined-risk bearish-to-neutral strategy that capitalizes on the high IV and time decay. SLB’s strong technicals and analyst bullishness reduce downside risk. The max pain at $35 strike further supports price stability around this level. The trade benefits from the high IV rank of 100%, capturing rich option premiums while limiting risk to $135 per spread.

📊 Pro Analysis

• High IV Rank (100%) strongly favors selling premium rather than buying options.
• SLB’s price is 4.7% above the 20-day MA, showing positive momentum.
• The expected daily move of ±$0.96 is well below the $2 spread width, giving a comfortable buffer.
• Put/Call volume and open interest favor calls but puts remain liquid and fairly priced.
• Earnings on 2026-01-16, so Dec 5 expiry avoids earnings volatility.

🔍 Earnings Date Check

• Earnings: January 16, 2026
• Recommended expiration: December 5, 2025
• Validation: ✅ Expires BEFORE earnings, avoids earnings risk while capturing premium decay.

💡 Trade Management

• Enter limit order to sell Dec 5 35 put and buy Dec 5 33 put for net credit ~$0.65.
• Target profit: Close position at 50-70% of max profit (~$0.32-$0.45) as premium decays.
• Stop loss: Consider closing if SLB falls below $34.50 to limit risk.
• Monitor technical support at 35 and 33 strikes.

🔒 Pricing Validation

• 35 Put intrinsic value: max(0, 35 - 37.43) = $0 (OTM)
• 33 Put intrinsic value: 0 (OTM)
• Spread max loss = $2.00 - $0.65 = $1.35, consistent with strike difference minus credit.
• Put-call parity and bid/ask spreads checked; prices consistent with market data.

🔍 Market Overview

The current market regime is moderately bullish for energy sector stocks like SLB, supported by strong technicals and positive analyst ratings. SLB’s dividend yield of 3.05% adds income appeal. The recent launch of AI assistant Tela™ and business restructuring are positive fundamental catalysts. The stock price is near its 52-week low but showing signs of recovery, trading above major moving averages. The Fed’s cautious stance on interest rates and upcoming CPI and NFP data may add volatility but favor defined-risk premium selling strategies. The oil services sector peers (HAL, BKR) show mixed performance, but SLB’s digital transformation and strong cash flow support a bullish bias.

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Confidence Level: Moderate to High. The trade offers defined risk, collects rich premium in a high IV environment, and aligns with technical and fundamental bullish signals. Downside risk is limited and manageable with the spread width.

Risk Assessment: Max loss of $135 per spread if SLB falls below $33 by expiration. The stock’s current price and technicals suggest low probability of this, but monitor for sudden sector or macro shocks. Avoid holding through earnings to limit volatility risk.