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Occidental Petroleum Corporation Message Board

  • bagholderslose bagholderslose Oct 23, 2012 9:18 PM Flag

    Loaded up on the OCT 26 $85, $82.50, $77.50 PUTS

    The put action on this stock has been incredible. Looks like insiders already know earnings will be below $1.67 and seems like they must be guiding down because it is some bearish people in this stock. I hope they are right, its quick money time

    Sentiment: Strong Sell

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    • Selling out-of-the-money weekly options such as the 10/26 $77.50 puts is a much higher percentage bet than buying them. Much, like a 80 to 90% win ratio. It's classic small-ball investing, with high odds and modest returns

      I sold 65 of the 77.50s, based on chart support and how far OXY would have to fall for me to get put the shares. It's classic small-ball investing, with high odds and modest returns. You are free to hope that a lot of put action means insiders see a miss coming, but perhaps it's just because a lot of folks like me routinely sell puts into stocks that have come down but have good value support. Occasionally I get put the shares, and then it's time to wait a bit for a bounce and start selling calls to the overly optimistic.

      I hope you didn't buy too many 85s or 82.50s, those will get utterly crushed today and there's almost no chance you can recover with expiry tomorrow. Buying one week options that are in the money is something more akin to gambling than investing, which is OK,I guess, if that's what you really want to do. At least the 77.50s were a cheap bet for you, albeit not very likely to pay.

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