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TRADE BULLETIN: XOP Butterfly (7/28) About to Expire – Call an Ambulance!

Posted on August 9, 2019

Gather round and pay attention, nature lovers – we have a trade closing today whether we like it or not.

And in this instance, regrettably, we don’t.

Not to worry, Feivish.  The trade was planned with a known maximum loss of $0.56.

And there’s a very good chance we’re gonna eat it all.

We’ll report back to you next week on the final tally, but in the meantime, it breaks down as follows.

Spell it out, Al!

The trade went out two weeks ago in a letter called Massive, Rollicking Profits! Get That Dental Work You Always Wanted!, and it urged you to sell the XOP August 9th 25 PUT for $1.01 and the XOP August 9th 25 CALL for $0.23.  With the proceeds ($1.24), we then urged you to buy the XOP August 9th 23.50 PUT for $0.26 and the XOP August 9th 26.50 CALL for $0.04.  Total credit on the trade was $0.94.

Now, there’s still a chance the stock’ll bump higher toward the $25 level – it is, after all, a very volatile number.  And that would be the ideal outcome for the trade.

But it’s unlikely.

More likely with XOP closing last night at $22.50, we’re going to eat the $56.

‘Nuff said.  There’s little left to be done.

On the road to redemption, there are bound to be setbacks.

Eschatologically yours,

Alan B. Harvard

 

2 responses to “TRADE BULLETIN: XOP Butterfly (7/28) About to Expire – Call an Ambulance!”

  1. Walid says:

    How did this happen? Wasn’t the trade set up expecting almost zero movement in the underlying?

  2. Hugh L. O'Haynew says:

    That’s right, Walid. It was.
    Only problem was we didn’t foresee the President’s announcement of additional China sanctions just days after we set the trade. It didn’t have a salutary effect, as you can see, on this initiative.
    But we covered ourselves well enough.
    The loss was disappointing, but by no means crippling.
    Keep in touch!
    All the best,
    Hugh

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