Energy Investing - The Most Hated Asset Class In The World...- CPE Covered Calls - Energy Investing - InvestorVillage
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Msg  293131 of 306506  at  10/17/2020 4:20:57 PM  by

Bearcatbob


 In response to msg 293124 by  MontyHigh
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Re: The Most Hated Asset Class In The World...- CPE Covered Calls

One can watch the option IV30 to see an indication of interest in energy shares and where opportunity may lie.

I have mentioned CPE before.

http://www.cboe.com/delayedquote/quote-table

CPE Nov $5 Calls have a beautiful IV30 of ~ 1.3. One can buy CPE at $4.70 and sell Nov $5 Calls for ~$.65. Now, if oil goes crazy and CPE runs away, the return would be $.65+$.30 = $.95 on $4.70.

If nothing happens, simply sell $5 Dec Calls.

If oil goes to hell - everyone here will suffer. Buyers of CPE would have $.65 of loss protection.

IMO this is a beautiful play.


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