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 before the close. Note: If you do not currently have this put-sell position already in your account, you will not be executing this buy-back order. Here's what you can choose to do: Buy back (buy-to-close) all of your TGT July 2017 $45 put options for a limit buy price of $.20 per contract or cheaper, GTC, as a closing transaction (buy-to-close). Currently, the market on this put option is $.17 bid/$.23 offer, so we're going to try to get filled right in the middle of that range. I believe we should be able to get some done today at our price of $.20 or cheaper. If you don't get filled, make sure it's working "GTC". Remember, when placing your order, you don't need to set your buy price right at $.20 per contract. You can start your bid at $.18 or $.19 and let it sit there for a few minutes. If no one bites, move your bid up incrementally until you are filled. Do not buy pay more than $.20 per contract. Don't forget to use the tools that were mentioned in last week's Q&A alert by one of our members on the "walk limit" feature if you use Charles Schwab as your broker. Check the Archives on our website to see last week's article if you don't have the original saved in your email. And if you use a different broker, inquire about a similar feature. If you'd like to hold this trade for longer to see if you can squeeze out more profit, then that's ok. You might feel like TGT stock won't be dropping in price anymore which would cause the put option to keep declining in value. That would be a good thing. You can decide. Officially, we will be exiting the trade starting today. Get those orders in if you choose to do so. That's all for now. I'll try to get a Q&A alert out later today. Continue to hold all other trades as-is. Contact us here with any questions. Regards, Lee Let's Grab That Cash!