I F*d up.
And when I do, I usually suffer the consequences – almost without exception.
But today is one of those exceptions. Thankfully.
Recently, in an effort to fade the rising volatility in the options market arising from the 3-4 week pullback from recent stock market highs, I sold naked puts in a large cap stock – Occidental Petroleum $OXY.
I like the name for a number of reasons, the most prominent being that Warren Buffett (Berkshire Hathaway) has been acquiring large blocks of stock just below current levels. This is support.
So when the broader markets were continuing their slide a couple of weeks ago, I felt $OXY was a high probability bet to hold these levels until the mini-market panic cooled off, and selling premium via $OXY puts seemed like an intelligent way to play it.
So far so good. [Read more…]