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OIH - Oil Service Holdrs Trust $86.85

The Oil Service Holdrs Trust (AMEX:OIH) is a unique instrument

that represents an investor's ownership in the stock of specified

companies in the oil service sector. HOLDRS allow investors to

own a diversified group of stocks in a single investment that is

highly transparent, liquid and efficient. Each HOLDR is a fixed

basket of stocks. They work operate much like ADRs; American
Depositary Receipts, as the investor actually owns the shares of
each underlying company, receives dividends, proxies, and annual
reports from each. The HOLDRs are not managed, and once the
companies and amounts have been determined they are fixed, no
companies will be substituted. In this way, the HOLDRs differ
somewhat from Spiders (SPDRs), or Standard & Poor Depositary
Receipts and other exchange traded funds, which will add and
delete stocks on a regular basis, usually in conjunction with an
index that they are tracking.

A complete explanation of this issue, including the companies
that make up each HOLDRS' particular industry, sector or group
can be found here:

http://www.holdrs.com/holdrs/main/index.asp?Action=Definition


Oil stocks have been among the few bullish sectors in recent
sessions and although the group as a whole is technically
overbought, any disruption to global crude supplies, or another
period of extremely cold weather in the U.S., will elevate their
share values. In addition, oil prices are subject to anxieties
over the upcoming elections in Iraq and the OPEC meeting at
the end of this month. With these considerations in mind, we
believe the majority of stocks in the oil service sector will
enjoy additional upside activity during the coming weeks.

Fundamentals: http://finance.yahoo.com/q/ks?s=OIH&quicken=2

Chart: http://finance.yahoo.com/q/bc?s=OIH&t=6m

PLAY (conservative - bullish/credit spread):


BUY PUT FEB-75.00 OIH-NO OI=10163 ASK=$0.10
SELL PUT FEB-80.00 OIH-NP OI=8907 BID=$0.50


INITIAL "NET-CREDIT" TARGET = $0.40-$0.45

POTENTIAL PROFIT (X 5 contracts) = $200
RETURN ON INVESTMENT (max) = 8%
COST BASIS = $79.60
LOSS-LIMIT/EXIT POINT = $81.00 (cons) - $83.00 (aggr)

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