New Trade & More Profit Time
Lots Of Updates!
Hello Smart Option Sellers! We've got a lot going on today, so make sure to read this alert very carefully. I have a new trade for everyone, an update on our WMT play from yesterday, and more profit-taking to do. Earnings season is in full swing so we're going to be busy. New Trade! GlaxoSmithKline (GSK) I love being able to sell put options on the highest quality pharmaceutical companies. Stocks such as Bristol Myers (BMY). Pfizer (PFE), and Eli Lilly (LLY) all deserve a spot in our portfolio when the time is right. And right now GSK is showing an opportunity. Here's what you can choose to do: Sell (sell-to-open) the November 2017 GSK $36 put options for a limit sell price of $.25 per contract or higher, GTC, as an opening transaction. Currently, this put option has a market of $.25 bid/$.40 offer, so we should have no problem getting them at our price. But remember, try to finesse your sell price to get the best deal. You don't have to immediately place your offer at $.25 per contract. Try offering it at $.35 or $.30 at first. If no one bites, then you can move it down to $.25 per. We don't want to tip our hand too quickly. I'll give an update on this trade tomorrow. PureFunds ISE Cyber Security ETF (HACK) Time to lock in gains on our HACK put-sell position. Note: If you have this put-sell position in your account, then you will execute the buy-back order today. If you don't have the position, then you can disregard these instructions. Here's what you can choose to do: Buy back (buy-to-close) all of your HACK September 2017 $23 put options for a limit buy price of $.05 per contract, GTC, as a closing transaction (buy-to-close). Currently, this put option has a small offer of $.05 per contract, so we can scoop those up quickly. If you don't get filled right away, just keep your order working "GTC". It will only be a matter of time. I will go over the results tomorrow. Wal-Mart (WMT) We were easily filled yesterday on our WMT buy-back trade. And we even got it done for a penny cheaper. Score! Here's what we did: Bought back (bought-to-close) all of the WMT October 2017 $60 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 16, 2017 for a sale price of $.30 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 $.25 per contract ($25 for every contract traded) and a return on margin (ROM) of roughly 2% in just over one month's time. If you like to annualize, that's roughly an 18% return. 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 $6,000 = $1,200. Your margin requirement at your broker may be slightly higher or lower. Ask them. So our margin requirement is $1,200 per each put option contract sold. Our profit on this trade is $25 for every contract sold. The return on margin (ROM) comes out to $25/$1,200 = 2%. The fill at $.05 also allowed us to capture 83.3% of the full profit potential ($.25 gain/$.30 full potential = 83.3%). We like to close trades early before expiration when we can capture at least 80% of the full profit potential (my "80% Rule"). No sense in holding until October (expiration month) if we've captured a majority of the gains. It frees up margin money we can put towards new trades. Great job everyone! That's all for now. Get those trades in there right away and let us know how you do. Contact us here Continue to work all other trades as instructed and continue to hold all other open 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! Regards, Lee Let's Grab That Cash!