Income Trade in XOM

[Steven Place]

After a good earnings report, XOM is going parabolic and rallying into key resistance.

I think XOM will correct, but most likely will put in a range instead of a full blown retracement.

Here’s a trade I like– keep in mind this is 1/3 of a position:

 

We will add to the position if XOM hits 90 or 96.

Target is 20% of debit, so about $40 per spread.

[Steven Place]

XOM had a decent continuation on news that Warren Buffett is parking some money into the company.

The stock is now at a spot where it makes sense to add.

Buy 3 Jan 90/95/100 call butterflies for 1.97

We will add a 3rd set around 97.50.

[Steven Place]

XOM is hitting 97.50 on a big breakout, but since we have less than 30 days to expiration in January, there’s no good adjustment here.

I’d rather just take the loss and move on.

Sell to close XOM Jan 97.50/92.50/87.50 put butterfly at 1.05
Sell to close XOM Jan 90/95/100 put butterfly at 1.75

Total loss for 3 flys is around -350. Not that big, but the ugly part of it all was the fact that it took so long for this trade to “resolve.”

[Author]

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