Insider: Trade Update (OXY)

Set a stop on the Occidental May 31, 2024 $62 Call (Sell to Close) at $0.24. These instructions are VERY important today.

Dear Fellow Insider:

I’m at 30,000 feet somewhere over North Carolina.

Took me a lot of impatience with in-flight WiFi to get us to this point.

This is a really important email. So, please pay close attention.

This is about our Occidental Petroleum (OXY) trade that expires TODAY.

On April 22, 2024, we sold the May 31, 2024, $60-$62 credit spread. We used $1.76 in margin for every $0.24 credit we received. Today, that trade will expire.

We sold the $62 put for today and bought the $60 put for the same expiration.

Today the $60 put will expire worthless. That’s not a bad thing.

What matters now is the price action on the $62 put.

We want to buy it back today for no more than $0.24 - which would be a BREAKEVEN on the trade.

But there’s still time, and it’s 11 am and the stock is at $62.02.

Shares are up this morning on the underlying stock, but we must play defense.

Many hours are left… and the stock just bounced off its 50-day level - acting as resistance. All remaining time value of this contract will decay into the afternoon, meaning that we’ll only see the intrinsic value emerge.

If the stock is at $61.80… then the put option for the $62 strike price would be $0.20 - as that is the mathematical difference between the two.

If it is 3:50, and the stock is at $61.95… the option will be worth 5 cents.

I just want to get out in front of this now.

• Buy to Close the Occidental (OXY_ May 31, 2024, $62 PUT for $0.24 or less.

  • If the put option is more than this - make a hard stop today at $0.30 or less.

• Let the Occidental (OXY) May 31, 2024, $60 PUT expire worthless.

• EXIT THIS TRADE BY THE END OF THE DAY.

If the contract expires today and the stock is UNDER $62… you will be assigned 100 shares of Occidental. So, be sure to CLOSE THIS POSITION by 3:55 pm today.

If shares stay ABOVE $62 at the close, then the put option will expire worthless, and you can keep ALL of the premium for today.

Given the price action on Occidental, a tie is okay right now. We may be looking to secure a small win here… but we don’t want to turn this into a loss.

If you want to take possession of the stock, I will state that we will likely sell another spread on OXY at a lower price level today. I’m specifically eyeing the July $55-$57.50 spread while trading another insider stock.

I’ll have a full issue for you at around 1:30 pm and an update on OXY as we go.

Stay positive,

Garrett Baldwin