Mark Sebastian Talks Options Trade On Royal Dutch Shell

OptionPit.com Founder Mark Sebastian was recently on Bloomberg to discuss the changes in oil prices and how it has impacted oil companies. He also shared his options play on Royal Dutch Shell plc (ADR) (NYSE: RDS-A).

"Well, crude is killing the non-diversified oil companies, those that have very specific sectors of oil they work in: the drillers, the pipelines, the services. But where I think there is some hidden strength is in some diversified vertical oil companies. The Chevron Texacos , Exxon Mobils, Royal Dutch Shell, BPs of the world, those that go from drilling to all the way to selling at the gas station have shown some resilience, some strength here and really are now at levels that I think have started to look really appetizing," Sebastian said.

"Royal Dutch Shell, in particular, trading at around $67 a share. It pays a dividend yield now close to 6 percent at these levels. I really like it as a long-term investment."

On his options trade on Royal Dutch Shell, Sebastian said, "a trade I would do is to sell the January 67.5 puts at $2 allows me to take delivery on the stock below 67.5"