If Oil Is at a Peak, Does Shorting Chevron Puts and Calls Make Sense?

Core Viewpoint - The article discusses the potential investment strategies for Chevron Corp (CVX) stock, particularly focusing on covered calls and the implications of recent stock performance and oil prices on future cash flow and price targets [1][3][4]. Stock Performance - CVX closed at $189.94 on March 6, 2026, reflecting a slight increase of 1.7% from $186.76 on February 27, just before the onset of the Iran war [1]. - Analysts have raised their price targets (PTs) for CVX, with an average PT of $185.92 from 26 analysts, which is lower than the current stock price of $189.94 [3][4]. Options Strategy - Covered calls at the $200 strike price yield a potential one-month return of 2.1%, while a $210 strike price offers a yield of 1.0% [1][6]. - The $200 call option has a midpoint premium of $4.05, allowing for a total potential return of approximately 7.43% if the stock reaches $200 by April 17, 2026 [5][6]. Market Conditions - The rise in oil prices to nearly $90 per barrel could significantly enhance Chevron's future cash flow, impacting analysts' price targets [3]. - The market has already discounted much of the uncertainty surrounding the Iran war and oil inventory levels, suggesting that current prices may reflect these concerns [4].