Posted on March 14, 2022
But we’re not.
As the old Wall Street adage goes –
Or something like that…
Anyway, we’re getting active today with another major oil producer – for a maximum potential gain of 9900% on just a nickel expended – but first we have a dagger to pull out of Philip Morris.
Take out your pens and paper, friends, ‘cause it goes like this –
The trade arrived on January 20th and was headlined: Tobacco, Anyone? Philip Morris Spurts Carcinomic Geyser. There, we recommended you sell the PM June 17th 100/105 CALL spread for $2.00 and buy the PM June 17th 100/95 PUT spread for $2.05. Total debit was $0.05.
The CALL spread can be repurchased for $0.86 (1.46/0.60), and we advise you do it.
The PUT spread is worth $2.95 (12.95/10.00), and we say sell it.
When all is said and done, you walk with $2.04 NET on just a nickel expended.
And that’s a very clean 4080%.
In fifty days.
Good on subscriber Arjun, who closed out before the weekend AND took on multiple units of the trade.
Now it’s everyone else’s turn.
We’re stalking integrated energy champ Chevron Corp. (NYSE:CVX) today, because you can never lube the engine of a cash-making roadster like ours often enough.
And here’s why we’re doing it:
Fundamentally, the stock trades with –
That may be why just three days ago, J.P. Morgan downgraded the stock from Neutral to Underweight.
Now look at six months’ worth of price action –
Technically, we’re in uncharted territory (forgive the pun) –
And that means we’ve got a trade.
A Jew and His Money recommends you consider selling the CVX April 14th 170/175 CALL spread* for a credit of $1.95 (8.75/6.80) and buying the CVX April 14th 165/160 PUT spread** for $2.00 (5.90/3.90). Total debit on the affair is a nickel.
Rationale: fallen in love yet? For a nickel, you stand to profit a full $4.95. That’s a gain of 9900%.
Max loss is $5.05 (difference between the CALL strikes plus the initial debit).
Breakeven on the trade comes with a decline to $164.95 (a drop of 3.4%).
The full brisket is brought home with a decline of just 6.3%.
But it’s all in the Al-mighty’s hands.
All, of course, except fear of the Al-mighty.
May you keep the mitzvot, good Jews and Loyal Noahides – each his own – and see yourself through to that great and glorious Day of Judgment.
When He will be One and His name will be One.
With kind regards,
Hugh L. O’Haynew