Trade Updates And Friday Q&A
Hello Smart Option Sellers! Glad it's Friday. Been a long week with lots of tough news and events to digest. I hope all of those affected by Hurricane Irma are on the mend and managing to get back to some form of normality. Let's go over some trade results. Gap, Inc. (GPS) We placed a $.05 bid yesterday to buy back our January 2018 $17 put option which we sold-to-open on August 22. We did not get filled on this trade yesterday so we'll keep the order working "GTC" for the time being. If we don't get filled in the next few days, I may have us pull the order. The instructions are listed below. Note: If you have the GPS put-sell position in your account, then you will execute this buy-back order. If you don't have the position, then you can disregard these instructions. Here's what you can do: Buy back (buy-to-close) all of your GPS January 2018 $17 put options for a limit buy price of $.05 per contract , GTC, as a closing transaction (buy-to-close). I also mentioned yesterday that the Retail Sales report was coming out this morning and that it could potentially cause GPS stock to drop if the numbers were bad. The numbers actually came in lower than expected and I thought it could hit some of the retail stocks such as GPS, but apparently GPS had other ideas. The stock is now trading higher on the day near $28.15 per share. If you unofficially bought the $27 or $27.50 puts on a cheap stab, this trade will most likely expire worthless today. Keep an eye on it though just in case GPS stock starts to fall at the end of the day. You'll want to close out the trade if it has any value at that time. Friday Q&A Q: Hi Lee, I had worked out that the put price of VZ had to drop to 0.05 in order for me to buy it back at your recommended 80% profit level. So I have had a GTC order sitting there for a couple of weeks (as I was away in BC, Canada visiting my son, and not able to get to my computer,) in case the price dropped during that time. It went through just before you sent out your alert. Is it a good idea to do this always or better to leave it to possibly achieve more gains? A: Great question. You can certainly do that. I have no problem with it. For us as a whole, I tend to like to wait until I see a $.05 offer show up instead of tipping my hand that early and letting the market-makers know I want to pay $.05 to buy it back. Once they know your bid is sitting there, they will "use" you as support for that put option and not fill you until it makes financial sense for them. Too much to explain how that works, but suffice to say, I'd rather not show our order until it works for us. Either way, your call. It worked out for you. Q: Hi Lee: Are DIS and MO looking like possible opportunities? A: Although I can't give individualized investment advice, I can comment in a group setting like this. So if you email me about specific stocks, this is how I will be able to answer. I've never been a big fan of MO although the stock has performed very well through the years. It's had a nice pull-back recently which is something we always look for when we sell put options. In this case, the stock is still above our typical price point. We try to stick with stocks that are sub-$50 per share. If you like the stock, then it could be right for you to sell put options if you believe it will go back up in price. We're staying away for now. Walt Disney (DIS) is one of my favorite all-time stocks. It's a great company and the stock has tripled in price between 2012 to 2015. The last two years though it's been in somewhat of a sideways pattern and is hovering around $100 per share. If it was cheaper, we'd be all over it with put-selling left and right. Back in the Instant Money Trader days (our previous service), we sold many a put on DIS. Unfortunately the stock price is too high for us now, but if you're confident in its long-term viability (which I am), then pick a price you're comfortable with potentially buying it and sell the put options. For us officially, we have to stay away only because the price is too high. That's all for today. Have a great weekend. You can reach 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 unless the current price is at, or higher, than the official recommendation. If you are unsure or have any questions, please ask us! Warren Buffett Report I continue to get good feedback on my new report, so I'll keep this notice going for the time being so everyone has a chance to see it. Here's a fresh article about Warren Buffett that might give you another reason to have a look at it. If you need the link again, click here to read about it. Regards, Lee Let's Grab That Cash!