Trade Update And Friday Q&A
Trade Update
Hello Smart Option Sellers! We placed two new put-sell trades yesterday on Intel (INTC) and Merck (MRK). We got a few fills so far this morning on Merck but not on Intel yet. Let's have a little patience on these, especially with the new healthcare vote happening today in Congress. If it doesn't pass, we could see a quick sell-of that would allow us to get into these trades quite easily. On the other hand, if it passes, we'll probably see a continuation of the up-move. Sometimes we will get filled right away and sometimes we won't. We place a limit order for a reason and that's because I'm trying to get the best option price for us based on all the existing factors that are present at the time I write up the alert. I'd rather give our order a chance to get filled instead of going right to the prevailing bid price. If we did that, we'd be giving money away each time. Let's not pad the market-makers pockets if we don't have to. Merck & Co. (MRK) Although we only got a handful of fills so far on Merck, we will officially follow it. Here's what we did: Sold (sold-to-open) the MRK September 2017 $47.50 put options for an official sale price of $.35 per contract as an opening transaction (sold-to-open). For those of you who have not gotten filled on either trade, just keep your orders working "GTC". If the market doesn't cooperate by Monday or Tuesday, I will send out an alert to adjust the option prices and/or the strike prices. Don't get discouraged in any way by lack of fills. It's just part of the trading environment. There will always be more trades to come. Trading options takes a little bit more finesse and patience sometimes, as compared to stocks. I'm here to guide you every step of the way. We will be successful! Friday Q&A Q: What happens if I hold a Call Option to expiration? Say the stock price is up $5 per share - do I realize the $5 per share gain (100% delta) if I let the Call Option expire - or do I need to either sell it or roll it before expiration? I know with Selling Puts, I can either Buy back the contracts prior to expiration at any time, or if I let them expire worthless I keep the full premium. So, with Buying Calls I am assuming I need to do something prior to expiration (unlike selling Puts)? A: If you hold a call option that is in-the-money (by $5 in your example) to expiration, then you have two choices: 1. It will be automatically exercised for you which will turn the call options into actual shares of stock. You will be required to pay for the stock in full at this time. 2. If you don't want the shares of stock, then you need to sell the call options (for the $5 profit) before the end of the trading day. In addition, you can "roll" it by purchasing another round of call options if you are still bullish on the stock. Q: One may be willing to take on a bit more risk by selling a PUT at a higher strike price than recommended, but one tends to adhere to the month recommended for such PUT. Is there strategic thought in the choice of month, such as the stock traditionally trades higher during that month? A: If you are going to choose a higher strike then the one I offer up, it is beneficial to stick with the same month I recommend. I certainly don't have any stats on seasonality for stocks (I'm sure there are), but our method is to always pick expiration months that are the shortest in duration while still giving a decent payout when selling the puts. That method still tends to bring us to expiration months that are two-five months in duration. Hope that helps. That's all for today. Have a great weekend. You can always contact us here. Regards, Lee Let's Grab That Cash!
Important Messages: 1. I'm on Twitter! What does that mean? It means I will be posting some of my thoughts from time to time on items related to investing, the stock market and how to be a smarter options trader. If you are already a Twitter member, please go to the website and click on the blue Twitter "Follow" button that you'll see along the top header. This way you can read my tweets and have instant access to some of my other thoughts. And don't forget to "like" or "re-tweet" my posts. This helps increase the public's awareness of the great things we're doing at The Smart Option Seller. Don't worry, no one in the public will have access to any of our trading ideas, nor will I post any of our current trades for free. 2. Don't forget to read my new "Put-Selling Basics" guide. It's a great refresher for both experienced and new traders. It's totally free. You can find it on the website or just click here to read. 3. Many of you are not taking advantage of our phone text alert messaging system. If you'd like to be notified on your mobile phone when a new alert is about to hit your email inbox, join our text alert system by typing in your first & last name and mobile number here: 4. All alerts will be archived on the website under the "Archive" section which you can find along the top menu of the website. If you are a new member, please use this section to read past alerts to see what we've been doing. This is a password-protected area for Smart Option Seller members only. Your password to enter this area is smartoption. Please write this password down and keep it in a safe place. You will need it to access the Archives. 5. Don't forget about our Referral Program. See details here: As always, if you have any questions, comments or feedback, please let us know. Thank you! You can contact us here.
Smart Option Seller Portfolio
Important Notice: All opinions, recommendations and content published by Smart Option Seller, LLC ("Company" or "us" or "we") are solely for informational and educational purposes, and should not be considered personalized investment advice. Your use of any investment ideas provided by Company is your responsibility and should only be made after consulting with your investment advisor and reviewing the public filings and financial statements of companies you are considering for investment. We do not receive any compensation from companies we write about. By accepting a subscription to The Smart Option Seller newsletter, you acknowledge that all ideas discussed in the newsletter are solely for informational and educational purposes and you agree to hold harmless Company and all Company employees and representatives for any investment losses suffered by you arising from ideas discussed or recommendations made in the Smart Options Seller website or newsletter. You should not make any investment decision based solely on what you read in the Smart Option Seller newsletter. The information provided is obtained from sources which we believe to be reliable, but we do not guarantee the accuracy or completeness of any such information. We are not liable for any losses suffered by you as a subscriber. Past performance is not indicative of future results. Please plan accordingly. We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Company is not a broker, dealer or investment adviser. In addition, our employees may answer your general customer service questions but they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. See our full Terms-of-Use here
