Nothing to Do But Wait
Nothing To Do But Wait Hello Smart Option Sellers! As I've mentioned many times in the past, one of the keys to profiting with put-selling is our ability to sit on our hands and wait for the option price to decay enough for us to buy it back for a profit. Patience is a virtue since there's not much for us to do once we enter a put-sell trade. We just let time take over and do its thing. Time is our friend, as it chips away at the value of the option. Did you know, regardless of which way the stock moves, ALL options will lose value every single day of its existence just due the sheer fact that time marches on. That's why it's so hard to win as an option buyer and so much easier to win as an option seller. Since "time" is part of what gives an option its value, the less time there is until expiration, the less value an option has. "Theta", which is one of the greek by-products of the option pricing formula, can tell us how much value an option loses each day, in dollars & cents. You can typically find Theta in the options chain software at your broker. I won't go too deeply into it as it's not something that's necessary for us to know on a day-to-day basis. Just know that Theta is there and working on our behalf! In the end, more time = more value and less time = less value. As time ticks away, so does an option's value. It's the like the invisible hand guiding us along as we approach my "80% Rule" threshold. Anyway, part of being a good option seller is having the patience to wait out these trades until it's time to buy them back. Add so this is where we stand at the moment. We're patiently waiting for our trades to hit the buy-back level. We have five open positions (and a sixth for the AA trade that only one member was able to get filled on last week) that are all in profitable territory from where we entered the trade. For any new member who has not entered the Oracle (ORCL) put-sell trade yet, you can still do so at the lower limits of the original recommended price. But, that window could be closing very soon. I continue to look for new trades, but at the moment, none that are worthwhile are popping up for me. So with the current lull, let me offer up two unofficial trades that are out of the realm of our parameters, but ones that might be suitable for you if you desire. Have a look at selling the Apple (AAPL) February 2018 $105 or $110 puts and/or selling the Johnson & Johnson (JNJ) January 2018 $100 or $105 puts. These are unofficial trades so I won't be following them if you decide to get involved. Also, the bid/ask spreads on these put options are pretty tight, but still try to get filled in between the current levels, if you can. That's all for today. I will be out of town tomorrow so there won't be a Friday alert. I will catch up with everyone next week. Send us your comments, questions & feedback here Regards, Lee
Current Portfolio 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. 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 no enter any order unless the current option price is at, or higher, than the official recommendation. If you are unsure or have any questions, please ask us!
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Warren Buffett Report I continue to get good feedback on this report, so I'll keep this notice going for the time being so everyone has a chance to see it. If you need the link again, click here to read about it.