Dan Deming's Chevron Trade

Dan Deming of KKM Financial suggested on Bloomberg Markets that investors should consider an options strategy in Chevron Corporation CVX.

He said that when put options outnumber call options 2.5 to 1 in major integrated oil companies, the market is getting closer to a bottom. Deming thinks that the stock is holding well, while the crude oil is trading at its lows. He also likes its 5 percent dividend yield.

Deming wants to buy the stock and sell the June 90 call option for $3.60. The premium collected from the sale of the call option offers 4 percent protection on the downside and it increases the selling price to $93.60.