Wednesday, March 9, 2022

Mulitple calls in the oil patch including a 2 day trade

Underlying Security Symbol:  CVX, PSX, VLO

 

I hate buying high and hoping the stock goes higher.  But today I am doing that because the catalyst is just too strong.  The catalyst in my opinion is the shortage of production capacity of oil.  This is not a supply chain issue.  This is a shortage of the end product.  I don't like buying high, but I am although I spread it out a bit. 

The best deal out there is still CVX

 

  • Dividend Yield 3.45%
  • Regular dividend increases
  • A May 20 call delivers $4.10 call premium income 


 

I filled a lot by buying 75 shares at $164.50.  

I sold the May $185 call for $4.10 and I should receive the dividend of $1.42 as the call expiration is after the expected ex-dividend date of May 15, 2022.

 

I wanted to spread out this chunk of money I am putting into energy so I selected PSX as the new name in my portfolio.  PSX is the second best deal out there for income investors.

 

  • Dividend Yield 4.66%
  • Recent dividend increase
  • A May 20 call delivers $2.70 call premium income 


 

I added 200 shares of PSX and sold a call against 100 shares.  My basis is $78.98.  The expected ex-dividend date is May 18, 2022 so I should be able to bank the $.92 dividend.

 

 

THE TWO DAY TRADE:

The third play I made today, trying to take advantage of weak oil prices, was to add VLO, Valero.  While VLO has a good dividend yield of 4.49%, they have not raised the dividend lately.  The best call I could find expired before the ex-dividend date so I would not be banking that dividend unless I still held the stock after the call expired.

However, I was compelled by a two day option.  I bought VLO at $87.32 and sold an $88.00 call for $1.20.  The call expires this Friday.  These little calls can help over time to fill my coffers.


 

 

 

 

 

 

 

 

 

Just a few interesting moves in an active market.

MM MoneyMadam

Data from Schwab.com and Marketxls 


1 comment:

MM MoneyMadam said...

UPDATE: This call performed as expected and was assigned. VLO has such a high P/E ratio that I am happy to use the proceeds and move into a different energy play. MM