Trade Adjustment
Hello Smart Option Sellers! Let's talk about our pending put-sell order on General Mills (GIS). They issued a statement earlier this morning in which they lowered earnings guidance due to a slowdown in their yogurt and soup sales. As we know, lowering guidance usually has the effect of dropping the share price of stocks - which it has this morning for GIS. It has fallen roughly $2 per share to its current price of $59.50 per share But we love that! Why? Because it gives us an opportunity to potentially get into quality stocks such as GIS at very attractive levels. I was convinced that with the share price drop, we'd be able to see multiple fills on our open put-sell order. As of now, I've only seen a few contracts trade at the lowest end of my recommended range of $.34 per contract. I think the option market makers are being stubborn with our strike price and not realizing the fair value of that option. As of now, I have it valued closer to $.40 per contract. For anyone who has placed a GTC order within my range of $.34 to $.39 per contract, you may want to think about possibly raising it a few pennies higher to allow the market to see where the real value is. When stocks move lower, especially on a gap down lower on the open, it has the effect of putting some panic into the market. That works to our advantage as it will temporarily pop the put options to a higher price. If we didn't have our offer in their now, I presume the current market on the $47.50 put options would be about $.26 bid/$.56 offer, giving it a middle value of roughly $.41 per contract. My recommendation at this point if you currently have a GTC order in at $.34 per contract would be to raise it to $.40 per contract if you wish, so we can be more in line with what fair value should be. This is not a new recommendation, it's just an opportunity to possibly get a better fill price. I'm leaving my original recommended range of $.34 - $.39 per contract as the official instructions, but just like stocks, option prices fluctuate too. I'm just giving you a head's up that if you have the time, you're more than welcome to adjust your own prices if you actively watch the market like me. But for now, my original instructions still stand: Sell (sell-to-open) the GIS July 2017 $47.50 put options for a limit sell price in the range of $.34 to $.39 per contract, GTC (good-til-cancelled), as an opening transaction (sell-to-open). Remember, do not sell for anything less than $.34 per contract. If anyone has sold below that level, you've done a no-no! Stick to my instructions! That's all for now. You can always reach us here: Regards, Lee Let's Grab That Cash!
Smart Option Seller Portfolio
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