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Potential Occidental Petroleum (OXY) Trade Has 6.29% Downside Protection

Feb 08, 2018 ( via COMTEX) --'s patented algorithms have identified an attractive covered-call trade on Occidental Petroleum (<a href="">OXY</a>). Look at the May 18, 2018 $67.50 covered call for a net debit in the $65.46 area.<br /> <br /> This trade has a duration of 99 days. The break-even point of this trade is the same as the net debit, which gives this trade 6.29% downside protection. If the stock closes at or above $67.50 at expiration this trade will return 3.10% or 11.43% annually (for comparison purposes only). <br /> <br /> If you're interested in a lower-cost hedged trade on Occidental Petroleum, consider buying the Jan 18, 2019 $50 call and selling the May 18, 2018 $67.50 call for a net debit of $16.39. A<br /> <br /> This hedged trade uses a longer-term bought call instead of the long stock position in a traditional covered call. The hedged trade lasts 99 days and would provide 4.96% downside protection. If Occidental Petroleum is at or above $67.50 when the market closes in May 18, 2018, this trade will make a full return of 6.70% of the initial capital at risk for an annualized return rate of 24.72% (for comparison purposes only).<br /> <br /> OXY closed Feb 7, 2018's trading session at $69.87. In the past year, the stock has hit a 52-week low of $57.20 and 52-week high of $78.09. Occidental Petroleum stock has been showing support around $68.29 and resistance in the $72.99 range. Technical indicators for the stock are bearish and S&P gives OXY 3 STARS (out of 5) hold ranking.

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