Profit Time

Profit Time

Hello Smart Option Sellers! We're going to be taking an early profit today. Target Corp. (TGT) We currently hold a put-sell position on Target for the July 2017 $45 puts. Although our strike price ($45) is currently $10 below Target's stock price of $55.25, I want us to close out the trade for a small profit today as Target releases earnings on Wednesday morning before the opening bell. We could certainly wait until Monday to initiate the trade which would probably give us a few more pennies of profit, but I wanted to give everyone a longer head's up. Target is part of the retail sector that doesn't get much love these days, unless they are hitting it out of the park each quarter. Many brick & mortar establishments are at the mercy of Amazon (AMZN) as they are on the quest of dominating the world as far as shopping for everything and anything. Many stores can't compete and are slowly withering away. I'm not saying this is happening (or will happen to Target), as I shop there all the time and will continue to shop there. They do have an online presence as well, but having Amazon breathing down your neck all the time, can make things a little more urgent. The stock price has declined by almost $10 per share since we initiated the trade in late January, and yet we are still in the black on this trade. That's the power of selling out-of-the-money put options. You can make a profit even if the stock price declines. But, for the sake of protecting our capital, and not wanting to be holding a position over an earnings release, we are going to close out the trade today. Sure, we can try to play the unofficial earnings trade again, which we did very successfully last quarter, but I'd rather lock in our gains now, and if you'd like to, you can entertain the idea of buying those options next Tuesday befo