Occidental Petroleum (OXY) was the subject of bearish put spread trading Friday. Shares are down 73 cents to $64.73, as some of the energy-related names slip on lower crude oil prices. Crude was recently down 35 cents to $69.88 a barrel.


In the options market, at least one strategist expects the weakness in OXY to continue over the next few months. The OXY November 50 – 60 put spread traded 2000X on ISE in early action Friday. In this spread, the strategist bought 2,000 November 60 puts for $5.27 and sold 2,000 November 50 puts for $2.27. Consequently, they paid a net debit of $3 per spread and will breakeven at expiration if OXY falls to $57. The best profits occur if the stock sinks to $50, -22.8 percent, or less by expiration. At that point, the spread has widened to $10, minus the $3 debit, and the profit equals $7 (excluding commissions). Of course, if the stock makes a volatile move lower sooner, the spread can also widen and the strategist can bank a profit by closing out the spread at any time prior to expiration.