Exxon Mobil Stock – Loss Taken To Roll Puts

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On Friday I took advantage of all the volatility to close my August $75 Exxon Mobile puts and sell 5 new puts for October at the $60.00 strike. That is a 20% discount to today’s price. Could Exxon Mobil Stock make it that low?

If it was my guess I would hope not, but if the economy slows more by the fall and we get some heavy selling in September and October, then I think Exxon Mobil stock could easily reach that price value.

Below is a one year chart of the Stock. The rise in the price of oil marked the dramatic rise in the price of Exxon Mobil Stock.

Exxon Mobil Stock - 1 Year Chart 2010 to 2011

Taking a cue from my own article on bear market strategies I decided that I would act now and move lower. This move freed up another $7,400 in capital which I can use for additional trades and reduces the amount of capital I have invested in Exxon Mobil Stock to about $68,000.00.

With the capital I have earned to date my average share price if I was assigned stock would be around $55.00. This could actually end up being close to at the money should the market get uglier this fall.

Overall the move to Oct $60.00 cost me a loss of $224.75. I believe I can easily make that up through rolling these puts forward when the stock falls lower.

My September $75 puts are still being held. I will roll them in a while once the stock either moves sideways or lower, which is what I am anticipating Exxon Mobil Stock will do.

EXXON MOBIL STOCK – CONCLUSION

I am now holding September $75 puts which have increased more than 300% in value since I sold them and Oct $60.00 puts which I sold for a dollar just due to the volatility in the market, in oil and in the stock in general.

You can read today’s action in Exxon Mobil Stock here. Just scroll to the bottom of the trade for today’s action.

The plan will be to roll all of these puts forward and if possible lower. If I cannot move them lower than I will be moving them forward to earn more premium to help pay for the shares when I am assigned Exxon Mobil Stock.

  • Stephen Almond

    Teddi,

    I think moving to the blog format is a great idea.
    I see these latest XOM trades aren’t yet included on your XOM page.
    Is this due to the start-up nature of the blog?

    By the way, I’m glad to see from the title of this piece that you are clear that rolling a position such as this (which includes buying back a short option for more than you sold it for) is taking a loss!
    So many seem to think that because you roll forward and sell a higher priced option, that no loss is made.

    Steve

  • Stephen Almond

    Teddi,

    I think moving to the blog format is a great idea.
    I see these latest XOM trades aren’t yet included on your XOM page.
    Is this due to the start-up nature of the blog?

    By the way, I’m glad to see from the title of this piece that you are clear that rolling a position such as this (which includes buying back a short option for more than you sold it for) is taking a loss!
    So many seem to think that because you roll forward and sell a higher priced option, that no loss is made.

    Steve