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EXXON
MOBIL
 
About The Company

Market Capitalization $414.6B
Revenue (FYR) $283B
EPS $4.79
P/E Ratio 15.1x
Shares Outstanding 5B
Dividend 1.76

Exxon Mobil Corporation (Exxon Mobil) is a manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a range of specialty products. It is a giant in its industry.  

 

 

 
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Of Use
 
By using this site, you agree to be bound by its terms of use. The full terms of use can be read here. If you do not agree to the terms of use, do not access or use this site.
Nothing presented is financial advice, trading advice or recommendations. Everything presented is the author's ideas only. The author accepts no liability for its use including errors and omissions. You alone are solely responsible for your own investing and trading. There are considerable risks involved in implementing any investment strategies and losses can be large. Trade at your own risk.

 
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  EXXON MOBIL CORP - 2011
EXXON MOBIL STOCK SYMBOL - XOM
ONGOING EVALUATION & TRADE - Year 2

The current strategy is selling puts on Exxon Mobil Stock until I either accept assignment OR get assigned shares. Then I will turn to selling covered calls on Exxon Mobil. Should Exxon Mobil stock fall too low making covered call selling impractical I will add to my stock position through selling naked puts to lower my overall cost. I am selling puts out of the money on Exxon Mobil Stock as this is an oil stock with higher volatility and wider swings in pricing. Should Exxon Mobil fall into what I believe is under valued territory I will consider selling in the money puts on Exxon Mobil Stock.
EXXON MOBIL TRADES BY YEARS
VIEW EXXON 2011 TRADES
VIEW EXXON 2010 TRADES
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Should you find my strategy and ongoing evaluation of this trade of value I hope you will consider a tip for the time I spend detailing out this trade. I have set up a Paypal account for those who would like to donate. Thank you in advance. Remember, nothing on my site is financial advice. They are just my ideas and opinions. Investing is risky and losses can be large. Trade at your own risk. Read the terms of use

 

 

YEAR 1: 2010
 Trade Commenced MARCH 2010
Goal for 2010: 10% (10 months)
Strategy: Commenced with A Bull Call Spread and changed to Naked Puts In June 2010
 
Capital In Use At End Of 2010 70,000.00
Income Earned in 2010 (10 months) 6754.25
Return On Capital in 2010 (10 months) 9.6%
   
YEAR 2: 2011
Goal for 2011: 12%
Strategy: Sell Naked Puts Until Assigned
 
Capital Currently In Use 72,519.50
Income Earned in 2011  7795.00
TOTAL INCOME EARNED TO DATE 14549.25
Total Of My Own Capital Required 57970.25
Number Of Shares if assigned 1000
Share Price Valuation
(Total Capital Required/Number of shares)
57.97
YEAR - 2:  2011
TRADE COMMENCED March 5 2010

GOAL FOR 2011: 12%
ONGOING STRATEGY - SELLING NAKED PUTS UNTIL ASSIGNED
* ACTIVE TRADES ARE HIGHLIGHTED IN YELLOW

Jan 21 11 78.50 STO 10 Naked Puts Feb $75 @ .55 0.73     19.50     530.50 7284.75
Jan 21 11 78.80 BTC 10 Naked Puts Feb $70 @ .14 (0.20)     19.50     (159.50) 7125.25
Jan 25 11 78.30 BTC 10 Naked Puts Feb $75 @ .15 (0.20)     19.50     (169.50) 6955.75

JAN 25 2011: Each roll higher has met with success. It may seems like luck, but actually there is real strength in the stock's uptrend. The last pullback in November saw a drop of about 3.5%. Since then the stock has been in a strong uptrend. I believe weeks ago I could have sold in the money naked puts and watched the stock move above my strikes. It is obvious to me that this stock has strong support and will easily push above $80.00. If not by Feb expiry then certainly into March. The strategy of selling out of the money naked puts is no longer as worthwhile as the strikes available for options are $5.00 apart and premiums therefore are best At The Money rather than out of the money. I am becoming less interested in the stock at these levels because of that. I will take one last leap and close my Feb 75 naked puts and move to Feb 80 and sell in the money for a much better return. From here though I may end up closing this trade and moving to another stock. My reasons are obvious. The stock has had a terrific move higher and at these lofty levels, the option premiums are not worthwhile unless I can continue to sell in the money puts. But I am not interested in being assigned shares at this level should the stock pullback.

 

Jan 25 11 78.05 STO 10 Naked Puts Feb $80 @ $2.55 3.1%     19.50     2530.50 9486.25
Feb 2 11 83.70 BTC 10 Naked Puts Feb $80 @ .30 (0.375)     19.50     (319.50) 9166.75
FEB 2 2011: TAKING A BREATHER IN XOM.
There are enough warning signs for me to close my naked puts on XOM and pull my capital out of the stock at this stage. It has been another dramatic rise for XOM and I am sure there is still more upside left, but with MACD flashing OVERBOUGHT every day, and more and more people piling into XOM, it is time for me to close my naked puts and get out. I will wait at the sidelines to see if the stock can pullback to the $80.00 mark before marching higher again. Below is today's chart. We have not had much of a breather in the rise since November's small 3.5% pullback. On Friday with the plunge in the overall market, MACD turned down, but it is right back up in the last two sessions as more buyers keep getting into the stock. Volume shows all the buyers flocking to XOM. That's another warning sign telling me that a pullback could take the stock lower than 3.5%.

Here are the stats on XOM and part of the reason why I think a break to the sidelines for me, is in order. When I was first interested in XOM last year, the stats were much better. XOM was trading BELOW all the industry standards and the PE was trailing by a wide margin. Today XOM has recovered to the rest of the industry. It still has lots of room to grow, but my interest is a lot less with these type of "normal" stats.

 

Do you recall the 3 year chart when I first was interested in XOM? Here is the chart from 3 years back and now at $83.00 the rallying is maturing. Therefore option premiums are also declining and with option strikes at $5.00 increments, it makes selling out of the money for half a percent return, not worthwhile. Getting half a percent a month is fine, but not when I am sitting with a stock that could fall from $83.00 to $75.00 overnight. So now the strategy changes.

Here are the options for today Feb 2 2011. The STOCK is trading at $83.65 at the time of my generating these options. These are MARCH puts that expire in a little over a month. The $80.00 put is now generating about 1%. Is it worth selling for a 45 day exposure at these levels for $80.00? No. BUT the strategy changes to one of watching for opportunities:

1) Should the stock fall to $80.00 or lower, than I would sell the $80.00 for larger premiums as I believe the stock will recover to $80.00 easily.
2) Should volatility pick up, then premiums could again make it worthwhile to sell short term puts, one month out.
3) On a pullback it is best to sell smaller quantities of put contracts AT SPECIFIC STRIKES as the stock reaches that strike. For example, if XOM falls to $79.50 - then I would sell 5 contracts at $80.00. If XOM falls to $75.00 then I would sell 5 contracts at $75.00.
4) With strike increments being at $5.00 a piece, it is better to stay on the sidelines and wait for opportunities. Meanwhile I can deploy some of the capital I had set aside for XOM, on different trades and possibly just keep back enough for 3 to 5 naked puts.

 

Feb 10 11 81.68 STO 10 Naked Puts Mar 80 @ 1.78 2.35%     19.50     1760.50 10927.25

Feb 10 2011: Back into XOM. The weakness this morning was perfect for my naked puts for March at the $80.00 strike.

Mar 14 11 82.35 BTC 10 Naked Puts Mar 80 @ .65 (0.8%)     19.50     (669.50) 10257.75
March 14 2011: The past three days have flashed a warning that XOM is under pressure and will probably fall further. You can see on my chart that the stock each day is going further through the lower bollinger and yesterday the stock broke through the 50 day EMA.  With just a few days to expiry and the stock on a bounce up today, I bought and closed my March 80 puts. I will wait a few days to see if the stock falls further and then sell into April.


 

Mar 16 11 78.90 STO 5 Naked Puts Apr $75.00 @ 1.18
COMMENTS: I sold just 5 Naked Puts and held the rest back in case XOM should fall further allowing me to sell naked puts below $75.00
1.5%     13.25     576.75 10834.50
Apr 15 11 84.29 Expiry: 5 Naked Puts Apr 75 expired                
April 15 2011: Just yesterday April 14, the stock closed at 83.44 but hit an intraday low of $82.38. The stock is sitting on the lower bollinger and the 10 day Simple Moving Average is pushing down. I see no point in selling the $82.50. It is still better to stay at $80 or below.


 

Apr 15 11 83.50 STO 5 Naked Puts May $80 @ .88 1.06     13.25   40013.25 426.75 11261.25
May 20 11 81.57 Expiry: 5 Naked Puts May $80 expired                
May 20 2011:

Exxon is a bright spot in my trades as it has pulled back 10% from its most recent high and allowed me to stay with the 77.50 and 80.00 strikes. If you recall from my XOM trade comments back in Feb, I expressed concern with the stock above 83.00, but back at 80.00 I believe the stock has good opportunity to recover to 80.00 should the stock fall lower. Therefore I can continue to put additional capital into my Exxon trade which will assist those trades that are not generating enough income. Back on Jan 31 the stock moved above $80.00 and has only briefly pulled below it. Looking at my chart below, anywhere below $79.50 will suffice for my trades. Therefore on any pullback next week I will sell up to 10 put contracts.

 

Examining the 6 month chart below, I can see that support for the stock is not really at $80 or 79.50, but lower, around the 70.00 strike. Any move down to that level would make a compelling case for buying the stock or selling in the money puts.

 

To understand this trade fully you may wish to read the MAY OPTIONS REVIEW to understand how I am deploying all of my capital in my US Portfolio.


 

May 23 11 80.28 STO 5 Naked Puts 18JUN11 $77.50 @ .86 1.07     13.25   38763.25 416.75 11,678.00
May 23 11 80.27 STO 5 Naked Puts 16JUL11 $75.00 @ 1.00       13.25   37513.25 486.75 12164.75
May 23 2011:

One trading session later and the market is selling off as it worries about a climbing US dollar. I took full advantage and sold the Jun 77.50 and the Jul 75 puts.

Now let us take a moment to reflect on the strategy as it now applies to EXXON. To date I have made $12164.75. If EXXON should pull back dramatically and I do not have the advantage of rolling further out for more income, I could be assigned on all 10 contracts.

That would put me in the stock at 76.28.

 

However taking into account my TOTAL INCOME EARNED TO DATE, my cost basis in the stock would be just $64.11. That is well below where I believe support is for the stock - namely $70.00

 


 

Jun 17 11 79.02 Expiration: 5 Naked Puts 18 JUN11 $77.50 expired                
JUNE 19 11

Patience is a strategy many investors ignore. Exxon Mobil is a terrific oil company. My naked puts for June expired releasing $38,750. Now the question is do I reinvest immediately through selling more puts or hold and wait to see a clearer direction in the stock. It is times like these that patience is the correct strategy to use, My comments and chart are too long to place with this trade. They can be read in a separate article here.

Jun 29 11 79.90 Sold 5 Naked Puts 20AUG11 $75.00 @ .92       13.25   37513.25 446.75 12611.50
Jun 30 11 80.85 Bought to close 5 Naked Puts 16JUL11 $75.00 @ .12       13.25     (73.25) 12538.25
Jul 29 11 79.76 Sold 5 Naked Puts 17SEP11 $75.00 at $1.19       13.25   37513.25 581.75 13120.00
Aug 5 11 72.25 Sold 5 Naked Puts 22OCT11 $60 at $1.00       13.25   30013.25 486.75 13606.75
Aug 5 11 74.70 Bought to Close 5 Puts 20AUG11 $75 @ 2.29       13.25     (1158.25) 12448.50
Aug 8 11 72.90 Bought to close 5 puts 17SEP11 $75.00 at 3.85       13.25     (1938.25) 10510.25
Aug 9 2011

Exxon Mobil fell hard yesterday as the price of oil continued to decline. I believe I am too high at $75.00 for September. I already have 5 puts for October $60.00. I decided to take a loss today and close my September $75.00 puts.

Today the stock pulled back hard in the mid-afternoon and I sold the September $60.00 puts. I sold 7 puts despite closing 5 Sept $75 puts yesterday. It still does not cover the loss of my buying back the September $75 puts, but I am quite comfortable staying at the $60.00 strike.

Exxon Mobil Stock - August 9 and August 9 2011

Aug 9 11 67.70 Sold 7 Puts 17SEP11 $60.00 $1.51       15.75   42015.75 1041.25 11551.50
Sep 6 11 70.00 Sold 5 Puts 22OCT11 $55.00 @ .54 0.93     13.25   27513.25 256.75 11808.25
Sep 16 11 74.25 Expiry: 7 Puts 17SEP11 $60 expired                
Oct 21 11 80.13 Expiry: 5 Oct $60 puts expired. 5 Oct $55 puts expired.                
Nov 1 11 75.88 Sold 5 Puts 17DEC11 $70 @ 1.38 1.9     13.25   35013.25 676.75 12485.00
Nov 1 11 75.88 Sold 10 Puts 19NOV11 $70 @ .71 1%     19.50   70019.50 671.00 13156.00
Nov 9 11 77.55 Sold 10 PUTS 19NOV11 $70 @ .23 0.32%     19.50   70019.50 210.50 13366.50
Nov 21 11 76.15 Sold 10 PUTS 17DEC11 $65 @ .31 0.49%     19.50   65019.50 290.50 13657.00
Nov 25 11 74.25 Sold 5 PUTS 19DEC $70 @ .55 0.78%     13.25   35013.25 261.75 13918.75
Dec 16 11 80.16 Expiry: 10 Naked Puts $65 and 10 Naked Puts $70 expired                
Dec 19 11 79.55 Sold 10 Puts 21JAN12 $72.50 @ .65 0.86%     19.50   72519.50 630.50 14549.25
EXXON MOBIL TRADES BY YEARS
VIEW EXXON 2011 TRADES
VIEW EXXON 2010 TRADES

 

 

Disclaimer: There are considerable risks involved in all investment strategies. Trade at your own risk.
Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed or presented are financial advice, trading advice or recommendations. Fullyinformed.com is a private website. Everything presented and discussed are the author's ideas and opinions only.
By using this site, you agree to be bound by its terms of use. The full terms of use can be read here. If you do not agree to the terms of use, do not use this site. The author of fullyinformed.com assumes no liability for topics and ideas discussed, errors and omissions, ads and their content and external links. Any corporate insignia used are registered trademarks of their respective company or corporation and are being used for identification purposes only. All material copyrighted by FullyInformed.com. Reproduction in whole or in part prohibited. Copyright 2008

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