Chesapeake Energy (CHK) , an oil and natural gas exploration and production company, engages in the acquisition, exploration, and development of properties for the production of crude oil and natural gas from underground reservoirs. It also markets natural gas and oil for other working interest owners in properties it operate. I guess we are literally going to the well once again.
As with HPQ, I want to sell as far out of the money as possible. There isn't any reason to sell closer to the money except in an attempt to recover losses from September stops. If you didn't stop your trade out at the prescribed level, then you could sell the Oct 37.5 for about $3.0 - 3.2 per contract. We will use a break and close below the low of $35.30 as the technical stop. To use the ratio stop scenario, multiply the execution premium price by 2.5 to get the actual stop price you can set.