You Like Facebook? Here's An Unofficial Trade
An Unofficial Trade Hello Smart Option Sellers! As the stock markets continue to churn higher, we're somewhat left on the sidelines waiting for smart put-option selling opportunities to arise. This has been a recurring theme for us over the years - the stock market refuses to give us even the slightest pull-back that lasts for more than a few days. Pull-backs are our go-to scenarios for jumping into great new trades. Why? Because we thrive on panic in the markets. When markets drop, volatility rises. And when volatility rises, it makes put options more expensive. This not only allows us to get more money when we sell the put options, but it allows us to go deeper out-of-the-money on the strike prices we choose, which gives us even greater downside cushion. All in all, pull-backs are a win for us. But during these never-ending rallies, it makes finding quality put-sell trades a bit harder. Some of you write to me about wanting more trades from time to time. Believe me, I would be more than happy to oblige. You think sitting in front of these screens all day, scouring for new trades, looking at countless stock charts, only to come up with nothing is fun? Heck no! But, one of the worst things we can do for our portfolios is to force a trade where no trade exists. Just because we may be bored and feel like we should be "clicking the mouse" to make a trade, is one of the fastest ways to give away our money. Don't do it! We are very conservative and safe with our picks and I won't compromise on that. The trades will come, don't worry. We're coming up on earnings season and that's one of the best times for us to make trades. Why? Because there are always top-notch companies that will have a miss, and that will give us an opportunity for a great put-sell. So hang tight. And for those of you who need some action immediately, here's an unofficial trade for you. I will offer these unofficial trades from time to time on stocks that I think are extremely worthy of the play, but fall outside our normal risk parameters to make it official. In this case, the only parameter that falls outside our range is the stock price, as we like to focus on stocks at $50 per share and under. Facebook (FB) FB stock had been flirting with all-time highs the other day near $190 per share. Then news came out that FB was altering the way that they configure user's "feeds" to encompass more content from their friends instead of media and advertisers. This took a little wind out of the stock's sails and dropped it about $10 per share to its current price of $179. I'm not a huge FB user, but the company currently has 2 billion active users per month. Incredible. Here's a current chart of FB. This current stock price drop will be a temporary blip and I certainly see FB moving back up in short order. If you agree with that assessment, and are somewhat bullish on FB, here's an unofficial trade for you. Here's what you can do (unofficial): Sell (sell-to-open) the FB June 2018 $110 or $115 put options contract as an opening transaction (sell-to-open). Currently, these put options have values of $.25 and $.34 per contract respectively. You choose which you'd like to enter. Once again, this is an unofficial recommendation, which means I will not be following the trade. If you get involved, just use all the same tactics we use for entering and closing the trades, specifically the "80% Rule" if successful. Let me know if you choose to get in. That's all for today. I will back tomorrow with the Friday Q&A and some follow-up ideas about a possible secondary service. Continue to contact me here Regards,
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!