I’m going back to Chevron for more puts.  This is a very strong vertically integrated oil and gas company that is resilient during downturns.  It has strong dividend growth so I’m happy with the possibility of short term market volatility resulting in my being assigned.  Besides, there will be lots of opportunities to write covered calls on such a position for bonus yield while I wait for appreciation.

WHAT: Sell CVX150417P00100000 for 1.65.  This yields 3.9% downside protection versus the current spot price.  Return is 1.65% or 19.8% annualized.  Assignment will result in a 4.35% yield.  Tasty.

The last time I went with CVX, I did a buy-write that returned over 70% annualized.  There is no longer that much volatility in the market now that oil futures have gone back into contango (traders are betting real money the price is stable or rising rather than falling in the future.)  For example, New York crude for April delivery is at 43.02 a barrel (CLJ15.NYM) while crude for May delivery (CLK15.NYM) is at 44.96 as of this writing.  This is our best indicator of future prices as it represents the premium real buyers are paying for future oil today.

Devour your prey, raptors!

Chevron Corporation (CVX)

Never miss another opportunity to devour prey!

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4 thoughts on “Chevron Corporation (CVX)

  • March 17, 2015 at 10:19 pm
    Permalink

    Nice move, FV. The return is really juicy.

    I have a little heavy position with CVX. But I did write a put on XOM with strike price $80.

    Reply
    • March 17, 2015 at 10:25 pm
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      Thanks MU. I also like XOM but prefer CVX just the tiniest bit based on recent replenishment of reserves.

      Reply
  • June 2, 2015 at 3:54 am
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    Any Puts/Calls on the Integrateds now ?
    Thanks
    Vish

    Reply
    • June 2, 2015 at 6:05 pm
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      Vish,

      You are my most active commentator. Thanks for being a part of the Raptor Experience.

      I like the Integrateds, especially CVX, BP, XOM, RDS-B when oil is below 60 dollars a barrel. We are currently in wait mode instead of buy mode on the big boys. I think midstream MLPs are more attractive in the current environment. KMI is my favorite in that space.

      Reply

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