New Trades

New Trades

Hello Smart Option Sellers! Let's get back to what we do best - sell put options!. I have two new trades for everyone today. Procter & Gamble (PG) PG stock is currently trading at $87.50 per share. When I first started Instant Money Trader (my previous service) in late 2008, the markets were in a free fall. It was easy to find sub-$30 stocks all over the place that we could sell put options on. Then as the markets started to rally, I tried to keep our threshold to sub-$40 stocks. Now, as we're eight years into this rally, it's hard to find enough sub-$50 stocks to concentrate on. Why does it matter? Because if we're forced to buy the stocks (not a bad thing), it's easier on the wallet to buy "cheaper" stocks. It's a bit psychological too. You sort of reach a threshold where you just don't want to pay for a $100 stock, even if it's a super high quality one. You can buy more shares of a $30 stock if it's just as high grade. People don't like to spend money, and I've heard enough times from our members that they would rather not buy any stocks and just keep collecting the cash. So my goal is to concentrate on the best quality, low-priced stocks that we can sell put options on. And that would entail sub-$50 stocks if we can find them. But PG is at $87.50. So what gives? It's just too good to pass up! So, if you want in, feel free to join us today. If you consider it too high priced, then you can certainly pass on it. We won't have many trades with stocks this expensive. But every now and again, we will. PG is a very high-quality stock Here's what you can choose to do: Sell (sell-to-open) the PG October 2017 $65 put options for a limit sell price in the range of $.25 - $.30 per contract, GTC, as an opening transaction (sell-to-open). Once again, with volatility so low, we are forced to move further out in time on the expiration scale. More time = more money. Along the same lines, if you go out to a longer expiration month, you are giving the stock more of a chance to fall in price, so we need to be even more conservative with our trades. I'm all about the safety. I was considering choosing the $70 strike, but I'm opting for less upfront cash but more cushion by choosing the $65 strike. If you feel comfortable selling the $70 strike, you are more than welcome to. But officially, we are trying for the $65 strike. Currently, the $65 put option has a market of $.21 bid/$.32 offer, so I feel confident we'll be able to sell some at $.25 per contract. If we can't sell any at that price, then we will look to modify next week, possibly using the $70 strike. Remember the rules: 1. We are going to sell these put options as our trade. We are not buying them. 2. Do not use a "market" order. Only use "limit" orders. 3. Do not sell for anything less than $.25 per contract. When placing your order, the best course of action is to start your initial offer price at $.30 per contract. If no one bites, you can move your offer down incrementally until you get to $.25 per contract (no lower!). Don't immediately place your order at $.25 per contract. That can scare the market away. It's best to move your order incrementally if you have the time and means to do it. Colgate Palmolive (CL) CL is very similar to PG, as they are both household names that are concentrated in very similar markets. CL stock is currently at $72.20 per share and also priced a bit higher than our usual trades. We won't be going as far out in time and we will be using a lower strike price. Here's what you can choose to do: Sell (sell-to-open) the CL August 2017 $55 put options for a limit sell price of $.25 per contract or higher, GTC, as an opening transaction (sell-to-open). Currently, the $55 put option has a very wide market of $.06 bid/$.47 offer, so we'll see if we can sell some at $.25 per contract. I'm not sure if the market will oblige us, but let's give it a try. Once again, remember the rules: 1. We are going to sell these put options as our trade. We are not buying them. 2. Do not use a "market" order. Only use "limit" orders. 3. Do not sell for anything less than $.25 per contract. Also with this trade, the best course of action is to start your initial offer price at $.30 per contract. If no one bites, you can move your offer down incrementally until you get to $.25 per contract (no lower!). Don't immediately place your order at $.25 per contract. That can scare the market away. It's best to move your order incrementally if you have the time and means to do it. That's all for now. Get those orders in there and let us know how you do. You can contact us here. For those of you who may have done some of the earnings plays on BMY & AMGN, if you have any options with value, it would probably be worth selling them to recoup any cash you can. Most likely it's BMY that would have any value. Check your commissions though. If you pay more in commissions than what you would get with selling the options, it might not be worth it. I'll try to send a short Q&A alert later today. Regards, Lee Let's Grab That Cash!

Recent Posts
Archive

THE SMART OPTION SELLER

©2016-2020 Smart Option Seller                Lee Lowell