Profit Results

Profit Update

Hello Smart Option Sellers! Let's go over some trade results. Emerson Electric (EMR) We held off on calling the EMR September $45 puts officially closed last week as only a handful of Smart Option Seller members were able to get filled on the buy-back order at $.05 per contract. But yesterday, anyone who was still waiting to get filled on the trade at $.05 has now been filled, and we will call this trade officially done with profits locked in. Here's what we did: Bought back (bought-to-close) all of the EMR September 2017 $45 put options for an official buy price of $.05 per contract as a closing transaction (bought-to-close). We originally established (sold-to-open) this put option on May 3, 2017 for a sale price of $.20 per contract, and now we took gains by buying it back (bought-to-close) for $.05 per contract. With the fill at $.05, it locked in a gain of $.15 per contract ($15 for every contract traded) and a return on margin (ROM) of roughly 1.67% in just over two and half month's time. If you like to annualize, that's roughly an 8% return. This was one of our smaller trades, but nonetheless still a winner. Here's how the margin calculations break down: Whenever we sell an option contract, your broker requires you to maintain a "margin requirement". The margin requirement is just part of your account funds that need to be held aside while the trade is active. You are not borrowing money from anyone nor are you paying margin interest to anyone. The margin requirement is typically 20% of what it would cost to buy 100 shares of the stock at the strike price. In this case: 20% x $4,500 = $900. Your margin requirement at your broker may be slightly higher or lower. Ask them. So our margin requirement is $900 per each put option contract sold. Our profit on this trade is $15 for every contract sold. The return on margin (ROM) comes out to $15/$900 = 1.67%. The fill at $.05 also allowed us to capture 75% of the full profit potential ($.15 gain/$.20 full potential = 75%). We like to close trades early before expiration when we can capture at least 80% of the full profit potential (my "80% Rule"). I mentioned in last week's alert how we were going to step just outside of the boundary and lock in 75% of the gain only because $.05 is the exchange minimum that we could buy this put option back for. This is just smart money management and it allows us to lock in gains and free up cash to be put towards new trades. Congrats everyone! Alcoa (AA) We also successfully bought back our AA put-sell position yesterday. By the time the alert hit your inboxes yesterday, the offer price on the put option went to $.05 per contract, so it made it very easy for us to close the trade at our recommended price. Here's what we did: Bought back (bought-to-close) all of the AA October 2017 $21 put options for an official buy price of $.05 per contract as a closing transaction (bought-to-close). We originally established (sold-to-open) this put option on June 15, 2017 for a sale price of $.25 per contract, and now we took gains by buying it back (bought-to-close) for $.05 per contract. With the fill at $.05, it locked in a gain of $.20 per contract ($20 for every contract traded) and a return on margin (ROM) of roughly 4.7% in about five week's time. Short and sweet, just the way we like it! If you like to annualize, that's over a 40% return. Here's how the margin calculations break down: 20% x $2,100 = $420. That's our margin requirement per each put option contract sold. Our profit on this trade is $20 for every contract sold. The return on margin (ROM) comes out to $20/$420 = 4.7%. The fill at $.05 also allowed us to capture 80% of the full profit potential ($.20 gain/$.25 full potential = 80%). Great job everyone. Two more trades locked in for profits. GoodYear Tire (GT) We did not get filled on the GT buy-back order from yesterday. The market on this put option still remains $.05 bid (that's us)/$.10 offer. I had us place the order as a "Day-Only" trade yesterday - meaning it would expire at the end of the day if not filled. We would then re-place the trade again hoping that the market on the put option would open at a $.05 offer instead of the $.10 offer, allowing us to immediately go in and buy it. My instructions might not have been clear enough yesterday to wait until I gave the go-ahead this morning to re-submit the order. I already see $.05 bids in there which I assume are Smart Option Seller members. So let's just turn this order into a "GTC" order and we'll wait to get filled at our price of $.05 per contract. The order is below with the new designation of "GTC". It will only be a matter of time until we are filled. Remember: If you have this put-sell position in your account, then you will execute the buy-back order. If you don't have the position, then you can disregard these instructions. Here are the instructions: Buy back (buy-to-close) all of your GT October 2017 $24 put options for a limit buy price of $.05 per contract, GTC, as a closing transaction (buy-to-close). That's all for now. Don't forget to contact us with all our trade results. You can contact us here Earnings season is upon us so I will be scoring for new put-sell trades from quality companies that happen to have a rare miss. This will cause the stock to drop and the put options to pop. The exact scenario we love. And of course I will try to offer a few earnings option-buy plays that could net us some big winners. These are unofficial and optional trades. That's all for today. Continue to hold all other trades 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! Regards, Lee Let's Grab That Cash!