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

To: Bull RidaH who wrote (562)	2/24/2021 4:42:18 PM
From: robert b furman	Respond to of 4446

Hi Bull, The momentum and money flow going into energy must ginormous. I rode this wave down, thinking if they cut the dividend in half, it would pay 4.5 to 5%. Given time crude had to recover, just was not sure when. So I sold 60 puts on XOM and 20 puts on CVX during the March April 2020 time period. I was so far underwater at one time. I thought they have to ship me sunshine in a can to see the carnage. With the vaccine news as a one punch and the cold freeze as a two punch, I'm amazed at how quickly the now 11 month out puts have decayed in value. I'm in the black on all of them except, an early sell on the XOM 55's, which have come out of the money just today. Almost hard to believe I may not get to buy any shares through assignment. The $88,964 in premium I received was at one time $150,000 upside down. It didn't bother me as I really wanted to take possession of XOM at the net assigned prices:27.50, 29.00, 36.00, and 49.00. The value of the premiums I received 10 to 11 months ago has now decayed to $47534, a $41430 gain. In retrospect, buying the dip would have been better, but I never judge myself that way. As it was, I bought a bunch of CVX through assignment just this last January - really just a lucky break to have sold the January 2021 puts. I still have the 20 90's for January 2022. I will happily receive the juicy dividends of these great oil companies for a long time. I'll sell some covered calls once some resistance shows itself, but they'll be way out of the money and pay just the frosting on a once in a generation opportunity to buy these huge companies on the distressed auction block. Gas and diesel are out of supply in 15% of Texas gas stations. My bet is those huge refineries will take several weeks to be operationally safe. In between those that stayed in operation will make a killing. My bet is the price of gas will go up, and stay up as they spoon feed the needy buyers some fossil fuels at nice margins. Margins they've not seen on a long time. Then this spring, the farmers are already complaining about the price of fertilizer. Those who had the cash flow to buy it this fall and winter are smiling. The price of plastics has also gone through the roof. I like XOM better, they are more diversified with chemicals and plastics on a global scale. CVX is just so conservative and has Permian assets from past decades at very low costs. Their world evolved to create the innovation needed to harvest the shale tight oil underneath the land they already had leased for soda straw wells. I always sleep better when the balance sheet of a company has no debt, or the least debt within their sector. CVX is #1 and XOM is #2 in balance sheet strength. I see some resistance on XOM at $66.93 ish, Giddy up! <smile> I started buying XOM via puts when it dropped below $70.00. Total position is $61.37 (5.67% dividend yield) not counting put premiums received. Gonna try to collect that and some call premium for 20 years or so. Lord willing. <smile> It has paid a good dividend all through this washout! Thanks for the shout and great idea Bull. Bob