Market Update

Market Update

Hello Smart Option Sellers! I'd like to welcome some of our newer members who have recently joined us. We're glad you're with us and if you haven't already, spend some time reading the past alerts which you can find in the Archives of the Members-Only section of the website. And of course, read my Put-Selling Basics guide and the Quick-Start Guide which can help you get up to speed on what we do here at The Smart Option Seller. Welcome aboard! Southern Co. (SO) Just a reminder to everyone - we cancelled the Southern Co. put-sell order from last week. Please read last Thursday's alert if you did not see it. And if you still have the order working, please cancel it at this time. The instructions are listed below. Outright cancel your sell-to-open order on the SO November 2017 $39 put options. Earnings Season Yup, earnings season is upon us and you know what that means - more opportunities for us to enter new put-sell plays. We love earnings season as it allows us to take advantage of short-term slips in high-quality stocks. Many great companies will miss analyst's projections from time to time and the stock gets hit to the downside in an undeserved fashion. This is our chance to strike and sell put options when everyone else is panicking. Put option prices pop on these short blips lower in the stock which always get bought back up as the true smart stock buyers come out of the woodwork (which then causes the put option prices to go down again). Our goal is to make the trade before the stock moves back up. So stay sharp people, and watch for my alerts. Earnings season also allows us the opportunity to buy cheap options to take advantage of any unexpected move (either higher or lower) in the stock, where we've already seen gains of over 1,000% here at The Smart Option Seller. I will continue to offer these optional and unofficial trades on the stocks that I think have the best opportunity to make large moves outside of most people's expectations. I continue to get requests for these trades, so for now, I will continue to give my best thoughts on how to take advantage of the situation. Netflix (NFLX) NFLX is the big one for today. They announce earnings after the market close. If you've read my previous methods in finding earnings candidates, you'll see that we need to concentrate on stocks that have a history of large gap moves after the announcement, but also offer cheap options within that price range. NFLX is one of the tech stocks that has been leading the charge higher in the stock market all year long. They are one of the FAANG stocks (Facebook, Amazon, Apple, Google & Netflix). And although NFLX has had a history of gap moves recently, the option prices are just not justified for us to take a position today. I've looked real hard at how we might be able to take advantage of this stock, but I'm not seeing any real good opportunities. At most, NFLX has had moves of $15 per share after announcing earnings. If we wanted to play it right, we would need to buy cheap options ($.20 per contract or less) with option strikes within that $15 radius in order to do it right. As it stands now, the cheap options are only available for a stock move of $30 or more. It's not the high probability play I'm looking for. Sure, NFLX could move that much, but based on its history, the chance is small. With NFLX stock currently at $161 per share, the $131 put options and the $190 call options are the nearest strikes that would allow you to buy for $.20 per contract or less. This is outside of NFLX's normal $15 gap range. For those of you unfamiliar with our earnings play strategy, we would look to buy both a call option and a put option, only because we have no way of knowing which way the stock will move after earnings are announced. In this case, we would want to buy cheap options within the stock's normal gap radius above and below its current stock price. If we could buy the $146 put options and the $176 call options for under $.20 per contract, we could do the trade. But both of those option contracts are nowhere near those cheap prices. As mentioned above, you'd have to go out to a $30 radius and look at the $131 puts and the $190 calls. It's not a trade I'm recommending, but for anyone thinking NFLX might blow it out in either direction by more than $30, you are more than welcome to give these strikes a shot. For me, I'll pass. I'll be scouring for stocks everyday now for potential plays for us, so keep a look-out for more alerts than usual. That's all for now. Continue to hold all other positions as-is. See the Current Portfolio below for current prices & instructions. Quick note on the Current Portfolio - if you are a new subscriber and don't have a position yet on any of our trades, make sure you enter your order at the original recommended sell prices. Do not enter any order at current prices unless it's higher than the official recommendation. If you are unsure or have any questions, please ask us! Please let me know if you have any questions. You can contact us here Regards, Lee Let's Grab That Cash!

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