Exxon Option Trade Idea Targeting Over 12% Return In 20 Trading Days!

What do you think of this debit option trade to capitalize on the unfolding commodity boom and the potential rotation out of technology stocks into commodity stocks?

Buy the ExxonMobil (XOM) April 2024 $100-$105 in-the-money vertical bull call debit spread at $4.45 or best.

After XOM stock technical analysis I executed this trade on March 15, 2024, with an expiration date of April 19, 2024.

ExxonMobil (XOM) presents an attractive opportunity as America’s largest oil major, especially amid rising tensions in the Middle East and Ukraine’s successful drone strikes on Russian oil refineries.

Furthermore, XOM offers a healthy 3.41% dividend, enhancing its appeal for investors seeking exposure to the commodity sector.

I didn’t want to pay more than $4.60 for the option trade to prevent chasing the price and in fact the trade was executed at $4.55 per contract.

If you don’t trade options, purchasing the stock is an alternative, but you might want to wait for a pullback in price for a more effective long stock position.

I anticipate a potential major rally in (XOM) and aim for ExxonMobile to remain trading above $105.00 by the April 19 option expiration day, 20 trading days from now.

Specifically, my entrance goal criteria was:

Buy 25 April 2024 (XOM) $100 calls at $12.00

Sell short 25 April 2024 (XOM) $105 calls at $7.55

Net Cost: $4.45

Potential Profit: $0.55 per contract, or 12.36% potential profit in 20 trading days for each contract purchased.

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