Selling APA puts for income.
Crude oil prices are moving higher today. Oil and natural gas stocks are still cheap compared to underlying commodity prices.
This leaves plenty of room for oil stocks to trade higher.
Shares of APA found support above $30 earlier this month. The stock is now rebounding along with the price of oil.
A late summer pullback gives us a great spot to add a new income play.
By selling the October $32.50 puts near $2.10, we’re able to collect an annualized yield near 37%, while also giving us roughly $2.70 per share in cushion between the current market price for APA and our strike price.
- Sell (to open) 2 APA October 21st $32.50 puts
- Limit: $2.10 or more
- The new position will represent roughly 7.3% of our model.
- 11:19 Executed
- Sold 2 APA October 21st $32.50 puts @ $2.17