The Money Tree

Safely Generating Income in Retirement

Update – Dividend Superstar – Chevron (CVX)

Posted by mounddweller on May 20, 2012

Fellow Traders,

It’s been a couple of weeks since my post.  A lot has happened to my positions since then.  So today I hope to update you on all of them and also tell you about some possible trades I’m looking to set-up next week.

First up is an update on my CVX trade.  As you’ll recall CVX is my very first trade using Ron Groenke’s new “Show the Trade” functionality in his VISIONS software.  As luck would have it my first trade is not going as well as I’d hoped.  Back on April 26th I bought 100 shares of CVX at $105.59 and sold an additional MAY $105 put at $2.02.  You can read my initial write-up here: https://troysmoneytree.wordpress.com/2012/04/26/new-trade-dividend-superstar-chevron/.

The objective of this trade is to sell CVX at $114.04 or better and to have the put expire OTM.  The stop loss on the stock portion of the trade is $97.14.

Friday, the stock closed at $98.46.  To avoid assignment of the stock at $105 I rolled the MAY put out and down to the SEP $100 strike for a net credit of $119.85.  CVX was trading at around $101 when I rolled the put.  Late in the trading session the market fell apart and so did CVX.   To break-even on the whole trade I need to sell CVX at $102.46 or better.

My path forward is clear.  I will honor my stop loss at $97.14 on my long stock position.  However, I intend to roll the put as necessary to exit the position with a gain.  Below is a current 1-year chart of CVX.

Regards,

Troy

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