It’s time to do a portfolio review of where we stand so let’s take a look at some key equity positions. While we are mostly sitting in T-Bills earning 5 percent interest on our cash holdings we have been executing opportunistic trades in oil & gas stocks. One of the largest positions is in DVN.
We have been executing buy/write strategies in DVN and selling 30 to 90 days calls on our position. It’s important to note that DVN will go ex-dividend on the 14th of June with a pay out of $0.72 per share (about 9 percent). Our trades should earn us about 20% or more but we’ll need to wait till expiry and if DVN should suddenly drop, we’ll buy back our calls cheap and keep earning the dividend.
The US recently announced a plan to purchase 3 million barrels of oil to refill the emergency reserve and Saudi Arabia has been warning of potential production cuts if the price of oil drops too far so we thought it prudent to be long and short oil hence our DVN trade.
Our other large position in oil & gas stocks is BP which is paying a 4.27 percent dividend or about $0.40 per share. We’ll be collecting a few thousand dollars on June 23 as we are now past the ex-dividend date.
Lastly we are still holding PUTS on XHB with January 2024 expiry. There are roughly seven months left for XHB to drop dramatically and many factors will come into play here. Will the Fed hike or pause on Wednesday’s FOMC meeting? What about July?
The housing market has been deteriorating in a variety of places but we’ll have to wait and see so stay tuned, stay profitable and stay solvent…