Dan Deming's Chevron Trade

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