Make Some Instant Oil Money to Kick Off The Week
Liz here, having writer’s block. Fairly sure it’s Pip, the unborn child, who keeps requesting cheese and has turned my brain into a giant, porous cheese block.
2 more months. Sigh.
By comparison, there’s only 4 DAYS LEFT on our RECESSION COUNTDOWN. (I kind of wish those two countdown clocks were reversed.)
The Atlanta Fed – as you know – predicts that July 1st will mark our second quarter of negative growth, which puts us in recession territory.
Now, those numbers won’t be officially released till the end of July.
Which means that all this coming month, we’ll likely be in a STEALTH RECESSION. (I made that term up, but it sounds both official and ominous.)
And you’ll have a little extra time to prep before that end-July announcement hits the presses…
Which means you’ll want to tune in to Tim and Shah’s Recession Action Plan tomorrow to find out where to put your money.
They’re committed to getting you 30% returns every year during the recession (which, let’s face it, is no small potatoes).
And they’ve got all the details for you tomorrow evening at 8pm.
Add your name to the calendar right here.
I’ve also got a fancy new Mark trade to kick off your week – he’s long oil again, which makes me wonder if I should get back into XOM. HEY, IT WORKED BEFORE.
Go here to getcha some gas money.
Mark’s “Super Bullish” on MRO
Marathon Oil Company is basically the villains from Avatar, which tells you all you need to know about their business prospects. In real life, those blue people wouldn’t have stood a chance.
Mark sent me over a couple of charts and said, “Volatility is really high. So let’s put on a pro trade I see all the time. It’s called a risk reversal.”
In a bullish risk reversal trade, you buy a long call, and “pay for the trade” by selling a put at the same time and collecting the premium.
However, MRO calls are extra expensive, so Mark’s adding an additional hedging step. He’s buying a call spread, plus selling the put.
“This is a super bullish trade,” he said. “We’re long the stock – it’s going above $26, up to $30. At $30, the spread makes $4.25.”
“Here’s the risk profile, if you need to see it,” he added, so of course I put it in because CHARTS ARE LIKE CANDY TO ME.
Here’s the trade, which owing to the hedge, I’ll classify as Nickel Slots.
I’ll also call it “instant oil money,” because as you’re aware, you’re collecting a premium right away when you sell the put.
Take a deep breath, because as I said, this one’s a little complicated…
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NICKEL SLOTS
Actions to Take: 1) Sell to Open the MRO August 19, 2022 $20 Put for $1.00 or better. 2) Buy-to-Open the MRO August 19, 2022 $26 Call and on the same order ticket, Sell-to-Open the MRO August 19, 2022 $30 Call. Pay up to $0.75 for the spread. Collect $0.25 net for the entire trade. Enter as a Good til Canceled Order (GTC). |
I’ll be back tomorrow with a Tim feature – he’s promised to make me a video explaining what not to buy ahead of the recession, as we all get ready for his 8 pm session telling us what we should buy.
Again, you can reserve your seat for the session right here.
Hang loose!
Liz
June 27 2022
