Chevron trades at less than 14 times forward price-to-earnings and generated over 18 billion dollars in free cash flow in the most recently reported quarter. The elevated implied volatility in CVX options, linked to geopolitical tensions in the Middle East and disruptions in the Strait of Hormuz, allows selling puts with attractive premiums representing an annualized return of approximately 14 percent. The proposed strategy involves selling the October 180 dollars put for 4.75 dollars, offering a probability of profit above 72 percent and an annualized return of approximately 14 percent. The company announced the transfer of its headquarters from San Ramon, California to Houston and the faster-than-expected realization of 1.5 billion dollars in synergies from the Hess acquisition.
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