New Trade! Hello Smart Option Sellers! As previously mentioned, when the stock market goes up in a straight line as it's done for what seems to be forever, it gets a tad harder to find those juicy put-sell trades that we love so much. Part of the problem is that when the market does go up unabated, it pushes the actual volatility of those moves down (less erratic). And since volatility is one of the main determinants of an option's price, we have seen that effect firsthand in that the price of all options have been pushed lower as well. This is a frustration to long-time put-sellers, including us. What we are left with is the only choice to accept these smaller payments - for now. If you have been with me for long time, you know how I lament about this situation. But, we can only play with what the market gives us. The good thing is that volatility is measured for not only the broad market, but for individual stocks as well. Sometimes they can move completely in opposite directions from each other, which is good for us. I always write about how we need to see a good pull-back now and then, because that sends panic through the markets, which in turn heats up the volatility, which in turn pumps up the option prices. But alas, we still haven't seen a decent drop in awhile, so we continue to forge ahead trying to find quality put-sell trades. And the good news is that I have found such a play today that I really like. Five Below (FIVE) I'm a big fan of the discount retailers such as Wal-Mart (WMT) and Target (TGT). And I'm a really big fan of the super discount retailers such as Dollar Tree (DLTR) and Dollar General (DG). I believe all these brick & mortar low-priced stores play a very important role to not just mainstream shoppers, but to anyone looking to get quality goods at cheaper prices. And yes, they have been able to compete with Amazon (AMZN). One of the stores in this category is Five Below, and they have been in business since 2002, and have been listed as a publicly traded company since late 2012. The stock has had a nice run over the last year, tacking on about $30 per share. It currently sits near $66.50 - here's the current chart. Although there could be a little bit of a near-term pull-back, I believe it will see higher prices ahead in the long-run. So with that assessment, we're going to hop into a new put-sell trade on FIVE. Here's what you can choose to do: Sell (sell-to-open) the FIVE May 2018 $39 put options for a limit sell price of $.25 per contract or higher, GTC, as an opening transaction (sell-to-open). Looking at my options chain, the $38 & $39 put strikes have similar bid/ask prices and it's tough to decide which I'd rather go for. Since I'd like everyone to have an opportunity to get filled on this play, we're going to shoot for the $39 strike, since that one would tend to be more expensive. Currently, the $39 puts have a market of $.20 bid/$.35 ask, so let's see if we can sell it for $.25 or $.30 per contract. Make sure when you place your order, you put in a $.30 offer price first, to see how the market reacts. Maybe someone will buy it at $.30 from us. If there's no budging, then you can move your offer price down to $.25 per contract. Remember, the stock price has a huge effect on the option price. If FIVE stock starts drifting lower, the put option will have a stronger bid (better for us). If the stock starts to drift higher, it will be harder to sell the put options at our price. So be aware of that. That's all for now. Get those orders in there and let us know how you do. You can contact me here Regards,
Lee Let's Grab That Cash!
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!