TRADE IDEA: XOP SEPT 21ST/JUNE 21ST 41/45 COVERED SHORT COMBO
Another covered short "combo" setup (see Post Below) with the delta metrics of a covered put sans the buying power effect of short stock and plenty of time to work out and/or reduce cost basis ... .
Metrics:
Max Loss/Buying Power Effect: Undefined/~$1234
Max Profit: $514/contract (realized on finish below the short put)
Break Evens: 46.14/no downside risk
Delta: -75.86
Theta: 1.4
Notes: XOP at long-term horizontal resistance with oil at 74.21/bbl./long-term highs. Work as you would a covered put, rolling out the short put on significant decrease in value, to maintain delta, and/or to defend the combo. Would look to take profit and/or manage at 20% of the buying power effect ($247 profit), although taking profit at 10% of the debit paid wouldn't be bad either ... .
Metrics:
Max Loss/Buying Power Effect: Undefined/~$1234
Max Profit: $514/contract (realized on finish below the short put)
Break Evens: 46.14/no downside risk
Delta: -75.86
Theta: 1.4
Notes: XOP at long-term horizontal resistance with oil at 74.21/bbl./long-term highs. Work as you would a covered put, rolling out the short put on significant decrease in value, to maintain delta, and/or to defend the combo. Would look to take profit and/or manage at 20% of the buying power effect ($247 profit), although taking profit at 10% of the debit paid wouldn't be bad either ... .
