Buy Call OXY

October 3, 2024
Sell a Third of Existing Position: Sell a Third of your OXY March 52.5 Calls for $5.90 or more.

Very quickly our OXY March 52.5 calls that we bought just yesterday are at a potential profit of approximately 20%. Let’s take a quick profit on a third, and then go for greater gains in the days/weeks/months to come.

To execute this trade you need to:
Sell to Close a Third of OXY March 52.5 Calls

Please note, after we bought our calls yesterday option activity remained VERY bullish including a buy of 20,000 Occidental Petroleum (OXY) March 60 Calls for $2.39 – Stock at 53.35.

And while I think odds favor OXY going higher from here, commodity stocks can be tricky, so let’s stick to the system.

October 2, 2024
Buy Occidental Petroleum (OXY) March 55 Calls (exp. 3/21/2025) for $5.50 or less.

As I noted yesterday OXY was racing to the top of my watchlist following two very strong days of option activity, including these trades:

Buyer of 4,000 Occidental Petroleum (OXY) January 55 Calls for $2.80 – Stock at 52.5

Buyer of 15,000 Occidental Petroleum (OXY) November 50 Calls for $2.96 – Stock at 50.75

That action has continued again today, again targeting a shorter-term move higher as well as a longer-term rise in OXY shares.

And while I think OXY stock looks not great, this option activity is too strong for me to pass up, and we are going to add a position … though as I note below, there are some “warts” in this setup.

To execute this trade you need to:
Buy to Open the OXY March 52.5 Calls

The most you can lose on this trade is the premium paid, or $500 per call purchased.

Here are some of the warts I mentioned above …

OXY stock looks “bleh,” along with many other oil names. And I don’t love dumpster diving.

Unfortunately, a further escalation of war in the Middle East might be a boon for oil and oil stocks. Essentially, peace in the Middle East might be bad for our trade … which is not a great feeling.

And while there are some warts, there are also several positive factors that could trigger a move higher in OXY.

There is no question the leading economic powers are all racing to cut interest rates, which should spur economic activity and strength in oil.

Warren Buffett is a big buyer of OXY shares.

And finally, maybe oil stocks play catch-up in the fourth quarter.

Regardless of the positives and negatives, the option activity is red hot in OXY, and to pay $5.50 for six months of exposure is a great risk/reward, and for those reasons, I am going to add the stock to the portfolio today.