“Sell to Close” 2 OXY LEAPS

I bought 2 Occidental Petroleum LEAPS back on 6/9/20. The stock was at $21. I bought 2 OXY 1/21/22 $20 LEAPS. I paid $8.50.

At the time Warren Buffett made a multi billion dollar investment into the company. It turns out the stock fell apart, and on 10/29/20 went down to a low of  $8.50. Buffett jumped out losing billions of dollars.

The stock has been fighting back ever since. Today the stock is up and having a big day. This is because they are announcing earnings today at the close. As I write the stock is up over $1.50 and is at $27.

At this time of me trying to build my cash I decided to get out before earnings. I have this option until January of 2022, but if the stock comes out with bad earnings and goes down again it might not recover in time for me to make profit. While the going is good I decided to grab what I can.

I placed an order to Sell to Close this position at $11. I was just filled.

6/9/20 – Buy to Open 2 OXY 1/21/22 $20.00 C @ $8.50

2/22/21 – Sell to Close 2 OXY 1/21/22 $20.00 C @ $11.00

Profit +$500

Remember a LEAPS is an option. It has an expiration. When dealing with buying options you must take profit!

Also, a LEAPS is a long term option. If I went with a short term option because of Buffett’s move I would have lost my entire investment. Because I bought a LEAPS I bought the time for my position to recover from the stock collapse going into it’s low on 10/29. I ended up making $500 on this long winded position. $500 is not the greatest profit but I only invested $1700. This is a 29.4% return on investment. I’ll take it!

Successful trading,

Steve

The Options Coach