Dividend Growth Forum

Closed my USO puts for a 29.6% gain in about two weeks. Kept a single put open so I will be forced to track it. It didn't move like I thought it would vs USO but I got the general direction right. I have much to learn.

(04-15-2020, 09:54 AM)fenders53 Wrote: [ -> ]Closed my USO puts for a 29.6% gain in about two weeks.  Kept a single put open so I will be forced to track it.  It didn't move like I thought it would vs USO but I got the general direction right.  I have much to learn.

Nice play.

The premiums/implied volatility on put options are so high that, absent consistently big circuit-breaker moves like the market had several weeks back, it is hard to get the 100+% moves that were easy when the VIX was half what it is now. I've been playing around with ideas on various options profits calculators, and the size of the moves needed for breakevens at expiry is staggering for most of the stuff I've looked at. 

Put in for futures trading approval with one of my brokerages, as I eventually intend to go long crude directly (rather than through USO).

(04-15-2020, 10:11 AM)Otter Wrote: [ -> ]

(04-15-2020, 09:54 AM)fenders53 Wrote: [ -> ]Closed my USO puts for a 29.6% gain in about two weeks.  Kept a single put open so I will be forced to track it.  It didn't move like I thought it would vs USO but I got the general direction right.  I have much to learn.

Nice play.

The premiums/implied volatility on put options are so high that, absent consistently big circuit-breaker moves like the market had several weeks back, it is hard to get the 100+% moves that were easy when the VIX was half what it is now. I've been playing around with ideas on various options profits calculators, and the size of the moves needed for breakevens at expiry is staggering for most of the stuff I've looked at. 

Put in for futures trading approval with one of my brokerages, as I eventually intend to go long crude directly (rather than through USO).

You are patient and the time for that will be right soon.  There were moments when I had called the direction of USO correct by 10% and my puts were profitable only 2%.  Nothing like I have ever experienced.  WTI could very well drop below $20, but I am just not convinced being short oil at $20 meets my risk reward standards.  I'll get long when I see some real pain from oil companies.  I don't see too many fracker BKs or any div cuts from majors yet. Maybe it doesn't happen but I think it will.

(04-15-2020, 10:24 AM)fenders53 Wrote: [ -> ]

(04-15-2020, 10:11 AM)Otter Wrote: [ -> ]

(04-15-2020, 09:54 AM)fenders53 Wrote: [ -> ]Closed my USO puts for a 29.6% gain in about two weeks.  Kept a single put open so I will be forced to track it.  It didn't move like I thought it would vs USO but I got the general direction right.  I have much to learn.

Nice play.

The premiums/implied volatility on put options are so high that, absent consistently big circuit-breaker moves like the market had several weeks back, it is hard to get the 100+% moves that were easy when the VIX was half what it is now. I've been playing around with ideas on various options profits calculators, and the size of the moves needed for breakevens at expiry is staggering for most of the stuff I've looked at. 

Put in for futures trading approval with one of my brokerages, as I eventually intend to go long crude directly (rather than through USO).

You are patient and the time for that will be right soon.  There were moments when I had called the direction of USO correct by 10% and my puts were profitable only 2%.  Nothing like I have ever experienced.  WTI could very well drop below $20, but I am just not convinced being short oil at $20 meets my risk reward standards.  I'll get long when I see some real pain from oil companies.  I don't see too many fracker BKs or any div cuts from majors yet. Maybe it doesn't happen but I think it will.

I think CHK is toast, but they have somehow managed to hold on as a zombie company for much of the past decade. That 200/1 reverse split has to be some sort of a record. 

XOM has issued about $20 billion in new debt in the past couple weeks. That would cover roughly a year of dividend payments at the current level, but I suspect they use quite a bit of it to buy distressed assets. 

I think an uptrend in crude itself will occur before a lot of the bankruptcies and dividend cuts are actually announced, but am curious to see what pricing looks like when storage limits are reached and demand is still essentially nonexistent.

(04-15-2020, 11:03 AM)Otter Wrote: [ -> ]I think CHK is toast, but they have somehow managed to hold on as a zombie company for much of the past decade. That 200/1 reverse split has to be some sort of a record. 

XOM has issued about $20 billion in new debt in the past couple weeks. That would cover roughly a year of dividend payments at the current level, but I suspect they use quite a bit of it to buy distressed assets. 

I think an uptrend in crude itself will occur before a lot of the bankruptcies and dividend cuts are actually announced, but am curious to see what pricing looks like when storage limits are reached and demand is still essentially nonexistent.

I don't see any way CHK makes it either. It's down 36% today following the reverse split, and now has a market cap of just $167M against a debt and liabilities load of nearly $12B.

OXY paid its preferred dividend to BRK with 17.27 million in new shares rather than cash this morning, further diluting shareholders and adding another $7.6 million in annual future dividend payments on the issued shares. This will happen every quarter going forward as there's no way the company can afford the $200M payment on the preferred in the current operating environment.

There's going to be a LOT of bankruptcies in the sector.

(04-15-2020, 11:03 AM)Otter Wrote: [ -> ]

(04-15-2020, 10:24 AM)fenders53 Wrote: [ -> ]

(04-15-2020, 10:11 AM)Otter Wrote: [ -> ]

(04-15-2020, 09:54 AM)fenders53 Wrote: [ -> ]Closed my USO puts for a 29.6% gain in about two weeks.  Kept a single put open so I will be forced to track it.  It didn't move like I thought it would vs USO but I got the general direction right.  I have much to learn.

Nice play.

The premiums/implied volatility on put options are so high that, absent consistently big circuit-breaker moves like the market had several weeks back, it is hard to get the 100+% moves that were easy when the VIX was half what it is now. I've been playing around with ideas on various options profits calculators, and the size of the moves needed for breakevens at expiry is staggering for most of the stuff I've looked at. 

Put in for futures trading approval with one of my brokerages, as I eventually intend to go long crude directly (rather than through USO).

You are patient and the time for that will be right soon.  There were moments when I had called the direction of USO correct by 10% and my puts were profitable only 2%.  Nothing like I have ever experienced.  WTI could very well drop below $20, but I am just not convinced being short oil at $20 meets my risk reward standards.  I'll get long when I see some real pain from oil companies.  I don't see too many fracker BKs or any div cuts from majors yet. Maybe it doesn't happen but I think it will.

I think CHK is toast, but they have somehow managed to hold on as a zombie company for much of the past decade. That 200/1 reverse split has to be some sort of a record. 

XOM has issued about $20 billion in new debt in the past couple weeks. That would cover roughly a year of dividend payments at the current level, but I suspect they use quite a bit of it to buy distressed assets. 

I think an uptrend in crude itself will occur before a lot of the bankruptcies and dividend cuts are actually announced, but am curious to see what pricing looks like when storage limits are reached and demand is still essentially nonexistent.

It seems crazy what oil majors will do to preserve aristocrat status.  They know the SP will be cut in half if they don't.  I don't know how crude prices can rise but it will find a way at some point.  An uptrend in crude will happen just as an uptrend in the S&P always happens well before the storm is actually over.  Maybe it already happened for the SPY but this is obviously extreme by any measure.

My pick is SAF.FP. Considering it speculative given in the travel space, but I think its long-term prospects are excellent.

Rock solid balance sheet so will be able to easily navigate the current business volatility. Amazing business with great growth prospects. It's basically a razor/razor blade business model in a duopoly structure so the long-term prospects are quite clear. Seems like the best part of the travel value chain and trading at a reasonable multiple after the covid hit.

Sold out of my SLV this morning for a 9% gain over the past couple weeks.

Rolled the proceeds into 3/19/21 SPY 255 Puts and some SQQQ. Feels like early February all over again. NASDAQ TTM P/E ratio above where it was on 12/31/19

(04-17-2020, 09:23 AM)Otter Wrote: [ -> ]Sold out of my SLV this morning for a 9% gain over the past couple weeks.

Rolled the proceeds into 3/19/21 SPY 255 Puts and some SQQQ. Feels like early February all over again. NASDAQ TTM P/E ratio above where it was on 12/31/19

Not a bad trade on SLV.  It really does feel like JAN-FEB.  Market is defying gravity and any connection to economic reality.  I've given up guessing.  I'll remain a little bit hedged and slightly overweight cash.  I just can't see a global V bottom economy.

1/21/22 $4 USO Calls this morning at $1.24/contract. Crude at $11/bbl. Wow.

(04-20-2020, 09:35 AM)Otter Wrote: [ -> ]1/21/22 $4 USO Calls this morning at $1.24/contract. Crude at $11/bbl. Wow.

I've been patiently waiting for you to check it.  Selling my USO puts at $18 WTI only looks half as brilliant this morning lol.

(04-20-2020, 09:35 AM)Otter Wrote: [ -> ]1/21/22 $4 USO Calls this morning at $1.24/contract. Crude at $11/bbl. Wow.

.88 Now

Unbelievable