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Strategies & Market Trends : TRIPLE TRADES -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (95)	7/29/2020 11:48:12 AM
From: robert b furman	Respond to of 4394

Hi Yard, I was just thinking that myself. $40.00 to $42.00 has become a range of daily trade. There's a lot of talk about Florida, Texas returning to SIP. Ain't gonna happen. Young people have been holed up and now it is summer time - time to find romance. Bottom line the globe is returning to normalcy - no one said the virus would completely go away. We did manage to bend the curve - the rest is dirty politics. IMO Gas and diesel demand /supply is going to exceed the 2019 numbers here very soon and it will stay that way for well over a year., possibly two. We've been hitting 11 to 12 year low rig counts and the shale oil is declining fast. Especially Bahken. Capex has been slashed from 30 to 50 percent in US E&P companies. Well depletion is a given. The poor deep water drillers have been stacking up almost all except the top technology rigs for years! If Opec + plays their cards correctly, we'll be pushing 50 - 60 by year end. If a large supplier (Iran) went out, Oil could well go parabolic in 2021 - 2022. There still is an incredible amount of premium built into the far out in time puts. I marvel at the time premium in CVX and XOM on strike prices that are near being out of the money out of the money. For example, An XOM put that expires in January 2022 with a strike price of $50.00 is selling for $12.50, (a net purchase price of $37.50 ) while crude is selling at $41.00 TO $42.00. If XOM cut their dividend in half, the buy price would yield 4.64%. If they hold the dividend steady, it would yield 9.28%.!? CVX has $90.00 put selling for $17.45 and half of the days CVX trades over the strike price. If CVX traded over $90.00 on expiration January 2022, it would yield 19.44% return on 1.5 years = 13% return on your money,and you get to hold the money for a year and a half. CVX has been steadfast about not reducing their dividend. Big fat premiums out there to be grabbed. If crude gets to $50.00, we'll see that vaporize. I think we've bottomed. Once we get past the election all of the political noise will instantly be gone, as oil advances up in price. Bob