Dykstra: Halliburton Options Ready to Move - TheStreet

Dykstra: Halliburton Options Ready to Move

This diverse company offers a strong options play.
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Today I'm focusing by deep-in-the-money (DITM) calls strategy on Halliburton (HAL) - Get Report, which closed Wednesday at $35.65. For me, this oil and gas conglomerate defines success.

Since 1919, Halliburton has been the world's leader in developing breakthrough technologies. From constructing monumental infrastructure projects to managing logistics for military operations, Halliburton has been the undisputed leader in the energy services and engineering and construction industries.

With more than 45,000 employees in nearly 70 countries, the company serves the upstream oil and gas industry throughout the life cycle of a reservoir, including locating hydrocarbons, managing geological data, drilling and formation evaluation, well construction and completion, and optimizing production through the life of the field.

The bottom line? Halliburton does much more than the public could ever imagine. Halliburton consists of three divisions: Production Optimization, Fluid Systems and Drilling, and Evaluation and Digital Solutions. I'm amazed that this great company can do so many things. The stock should be trading at $50, period!

Check out these numbers: Halliburton has a forward

P/E of 12.55, a return on equity at 31.80%, $23 billion in revenue, and more than $3 billion in cash. Its free cash flow after it pays its bills comes in at more than $1.65 billion.

Using our DITM calls strategy, I am going to buy 10 DITM calls going all the way out until January (HALAF), using a $30 strike. Using a limit order, I will pay $6.50 or better.

Always remember: Life's a journey; enjoy the ride!

At the time of publication, Dykstra was long HAL.

Nicknamed 'Nails' for his tough style of play, Lenny is a former Major League Baseball player for the 1986 World Champions, New York Mets and the 1993 National League Champions, Philadelphia Phillies. A three time All-Star as a ballplayer, Lenny now serves as president for several privately held businesses in Southern California. He is the founder of The Players Club; it has been his desire to give back to the sport that gave him early successes in life by teaching athletes how to invest and protect their incomes. He currently manages his own portfolio and writes an investment strategy column for TheStreet.com, and is featured regularly on CNBC and other cable news shows. Lenny was selected as OverTime Magazine's 2006-2007 "Entrepreneur of the Year."