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XOP trade ideas

TRADE IDEA: XOP NOV 16TH 41 SHORT/MARCH '19 50 LONG PUT DIAGONALMetrics: Max Loss/Buying Power Effect on Setup: $636/contract Max Profit on Setup: $264/contract (41.54% ROI at max; 20.75% at 50% max) Break Even: 43.64 versus 43.58 spot Debit Paid/Spread Width Ratio: 70.7% Theta: .84 Delta: -54.75 Notes: I'm not going to put this setup on quite yet, as I would prefer that the price of the underlying be "at the top of the box" (~44.50), but always like to price potential setups out ahead of time and then tweak them a little bit as price of the underlying may dictate. I generally start out looking at these directional setups with the front month short option at the 30 delta and then adjust the back month long so that the break even is as close to the spot price as possible. Additionally, I like to pay less than 75% of the spread width, so that 70.7% debit paid/spread width ratio is a decent metric. You can naturally go shorter in time with the back month (which will result in a cheaper setup), but I like to give myself plenty of time to reduce cost basis in the setup over time with rolls in the event I don't get the movement I need to exit the trade fairly quickly. As far as trade management is concerned, look to take profit at 50% max, Roll the short put out on significant loss of value (usually 50%), and then recalculate your scratch/take profit targets ... .
AMEX:XOPShort
by NaughtyPines
1
OPENING: XOP SEPT 21ST 40/44 SHORT STRANGLE ... ... for a 1.31/contract credit. Probability of Profit: 62% Max Profit: 1.31 ($131)/contract Max Loss/Buying Power Effect: Undefined/6.68 ($668) Break Evens: 38.69/45.31 Delta: 3.65 Theta: 2.75 Notes: Giving myself more room to be wrong with a short strangle in the September cycle. Implied volatility remains so-so here at 24.7% (near the bottom of its 52-week range), so it might be more worthwhile to wait for higher implied. That being said, I'm basically working XOP as an "all weather core position."
AMEX:XOP
by NaughtyPines
OPENING: XOP SEPT 21ST 42 SHORT STRADDLE... for a 3.05/contract credit. Metrics: Max Profit: $305/contract Max Loss: Undefined: $848/contract on margin Break Evens: 38.95/45.05 Delta: -6.55 Theta: 3.31 Notes: Admittedly, the implied volatility rank and implied volatility metrics here aren't great (11 and 25, respectively) but the credit collected as a function of the buying power effect is decent (36%). As with the previous XOP short straddle cycle (see Post Below), I'll look to take profit quickly ... .
AMEX:XOP
by NaughtyPines
2
OPENING: XOP Aug $42 big lizardSold the XOP 100 17 AUG 42/45 'big lizard' for a credit of 2.90. The strategy is essentially short the 42 straddle with a long 45 strike call to limit the upside risk. The 'proft zone' 39.11-44.90 with almost no risk to the upside. I plan to manage a winner early to collect around $70-75 ( 25% of the initial credit ). Currently there's 46 days to expiry but I'd like to see this closed for profit before July is out. For the downside risk, if the XOP pullback is dramatic enough, I'd take assignment at 42 with a reduced cost basis around 39. I can then sell calls against the stock after to further reduce cost basis.
AMEX:XOP
by dime
TRADE IDEA: XOP SEPT 21ST/JUNE 21ST 41/45 COVERED SHORT COMBOAnother covered short "combo" setup (see Post Below) with the delta metrics of a covered put sans the buying power effect of short stock and plenty of time to work out and/or reduce cost basis ... . Metrics: Max Loss/Buying Power Effect: Undefined/~$1234 Max Profit: $514/contract (realized on finish below the short put) Break Evens: 46.14/no downside risk Delta: -75.86 Theta: 1.4 Notes: XOP at long-term horizontal resistance with oil at 74.21/bbl./long-term highs. Work as you would a covered put, rolling out the short put on significant decrease in value, to maintain delta, and/or to defend the combo. Would look to take profit and/or manage at 20% of the buying power effect ($247 profit), although taking profit at 10% of the debit paid wouldn't be bad either ... .
AMEX:XOPShort
by NaughtyPines
2
XOP MAY 18TH 30/32/39/41 IRON CONDOR (LATE POST)I apparently neglected to post this when I put it on back on March 27th in the kid's small account, and am doing so here primarily to keep track of cost basis. Here's the blow by blow: On March 27th, I opened this trade for a .50/contract credit. On April 7th, I closed out the short put side for a .05/contract, with a resulting cost basis of .45/contract. Because I needed some short delta, as well as thinking that oil would come off its highs post-OPEC jawboning, etc., I haven't yet moved to cover the short put side or to roll out the short call side for duration (to the June monthly) and then sell a short put vertical against. I will look at doing that next week ... .
AMEX:XOP
by NaughtyPines
XOP (US): Consoldiation breakout?The large triangle pattern is about to break to the upside. It's not one of our favourite patterns and we prefer to avoid long-exposure in stocks (regardless of sector) at the moment, but for those seeking long opportunities, the energy (-related) sectors are probably best. Also, selectively (!) base metals and pm-miners offer some opportunities, but you really have to go look at an individual level. Personally we're not playing the XOP opportunity this time.
AMEX:XOP
by buyem_nl