XOM Low-Risk Earnings Play
Updated
XOM setting up nicely for a Low-Risk/High Reward Protective Put over earnings.
Heres the setup:
Long XOM - 85
Long FebWk1 85 Put - .88
Limit/Debit -85.88
Target: 91
Max Profit - 5.12
Max Risk - .88
R:R - 6:1
Plan A:
If trade goes my way, i will place a hard stop at 84, hold stock for dividend, and sell half my position at 87.90, if and only if, the stock price takes longer than a week to reach that price. Else If it closes above 88 within a week I will hold and take all at 91.
Plan B:
If earnings disappoint then I will hold until FebWk1 expiration in order to get an idea were the stock is going. Unless the stock gaps down and trades back up to a close over 85 by Friday Feb 3 I will exercise my right to sell at 85 for a small loss of .88
Thoughts:
If XOM cannot close below or come near 83 prior to FebWk1 then I will assume the buying pressure is strong at this level and look for another bullish entry in order to capitalize on the dividend, buy low-sell high situation, and current uptrend in the sector
Heres the setup:
Long XOM - 85
Long FebWk1 85 Put - .88
Limit/Debit -85.88
Target: 91
Max Profit - 5.12
Max Risk - .88
R:R - 6:1
Plan A:
If trade goes my way, i will place a hard stop at 84, hold stock for dividend, and sell half my position at 87.90, if and only if, the stock price takes longer than a week to reach that price. Else If it closes above 88 within a week I will hold and take all at 91.
Plan B:
If earnings disappoint then I will hold until FebWk1 expiration in order to get an idea were the stock is going. Unless the stock gaps down and trades back up to a close over 85 by Friday Feb 3 I will exercise my right to sell at 85 for a small loss of .88
Thoughts:
If XOM cannot close below or come near 83 prior to FebWk1 then I will assume the buying pressure is strong at this level and look for another bullish entry in order to capitalize on the dividend, buy low-sell high situation, and current uptrend in the sector
Trade closed manually
Exiting this and looking for a new bullish setup since 82.50 is holding support and new talk about sanctions on Iranian imports.
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