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Oil rally and oil stocks look to have stalled out. The last rally up ti the $42 level on crude signified the biggest short covering rally on record. With the shorts now done covering, weak fundamentals and a stronger dollar should put alid on a further leg higher.

ExxonMobil (XOM) is the biggest of the big oil producers, and the stock looks toppy around the $84.50 level.

Let’s give ourselves an even bigger cushion and position for a stall out in the oil rally just above the recent highs at $87.


Sell the XOM May $87.50 calls
Buy the XOM May $90 calls

0.55 net credit

Net margin requirement $195 per spread.