🔥 Oil Supply Fears Shake Markets: Exxon Mobil at the Epicenter

Exxon Mobile Corp. (XOM) is trending in the news as oil prices rise on concerns about the escalation of the situation w Exxon Mobile Corp. (XOM) is trending in the news as oil prices rise on concerns about the escalation of the situation with Israel, Hezbollah, and Iran. You can see the recent increase in the one-month implied volatility expectations (the lower green line) in the time-series chart below. The increased threat of war enveloping this important, oil-rich region is having a huge impact on volatility expectations for oil prices. Economic news about oil & gas supply has a much bigger impact on volatility expectations for companies that are dependent on oil & gas commodities than just about any other factor. We mention this because the Employment Report is due this morning before the market opens. While many investors are watching the employment report to guide their investment decisions this morning, XOM investors will be watching for news to see if the Israel/Iran conflict will affect Iran’s oil production. Rising volatility expectations provide us with an opportunity to sell expensive Zero-Days-to-Expiration (0DTE) options on XOM using a limited-risk, high probability strategy. [This Volatility Term StructureÂ]( chart for XOM shows that volatility expectations for today’s expiration are the highest by far. While the employment report, due before the market opens, may tame volatility expectations on other assets, it is unlikely to impact volatility expectations on XOM. Volatility expectations on XOM are high because volatility expectations on oil & gas are high, which in turn are high due to potential disruption of oil supplied from the Middle East. That fact is unlikely to change much based on today’s employment report. [This MDM graphÂ]( compares the modeled expected distribution for future stock prices (the orange line) with the actual distribution of XOM’s share prices over the past year (the blue histogram). You can see that the actual stock movement does not look like the modeled expectations. This graph tells us that expectations are extreme. Investors expect larger moves than XOM shares have a tendency to make in a single day during the past year. Options prices are expensive compared to the past stock behavior. XOM options expiring today are relatively expensive. Investors are overestimating the chances of XOM shares making a down move greater than 1.7% today. This opens an opportunity for a limited-risk, high-probability Put Credit Spread. Remember, we are not saying that XOM will not move down today, we are saying that a downmove is unlikely to be greater than a 1.7% decline while oil prices are moving up on concerns about oil supply in the Middle East. Oil supply concerns are unlikely to be resolved before the end of today’s trading. To get the specific details and prices on today’s trade ideas, be sure to read today’s ODDS Online Daily Option Trade Idea.  To access Odds Online Daily and be able to see any stock you are tracking in this software, click [here](. Thank you, Don Fishback --------------------------------------------------------------- See Related Articles on [TradewinsDaily.com]( [Exxon Mobile Corp. (XOM), Trending Stock Report]( [As The Chop Continues Watch Out For Traps]( [Chart of the Day: Dell (DELL)]( [CAT: The Technicals Suggest a ‘Buy’]( [Tesla, Inc. (TSLA), Trending Stock Report]( --------------------------------------------------------------- [TradeWins Logo]( © 2024 Tradewins Publishing. All rights reserved. | [Privacy Policy]( | [Terms and Conditions]( | [Contact Us]( Auto-trading, or any broker or advisor-directed type of trading, is not supported or endorsed by TradeWins. 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