Selling Cash-secured Puts On This Oil & Gas Takeover Play

Hello, short notice on today’s meeting, but I have an emergency grandpa babysitting emergency. Apparently, the kids need to watch me today because my daughter’s babysitter canceled at 5am. 

I will be doing tonight’s webinar at 7pm central. 

Selling OXY Puts

Occidental Petroleum (OXY) is one of the safest stocks on the market due to Berkshire Hathaway’s (BRK.B) continued buying of shares. Berkshire was given authorization to buy 50% of the stock on the open market recently. They’re on their way. And, they have warrants to buy the majority ownership of the company after they soak up 50% of the shares. Very clearly a slow-motion takeover in process. 

I am selling the OXY December $60 cash-secured puts for the asking price (which was recently $5.50). That gets you around a 9% return to December. I am making it a double position, meaning that OXY shares are put to me, I’d have a roughly 8% position. Given that Berkshire’s warrants are a bit over $59 per share, and that oil and gas aren’t getting cheap until at least a year from now, I feel pretty safe on this. 

Sell OXY December $60 cash-secured puts for $5+