Market Update And Friday Q&A
Market Update Hello Smart Option Sellers! Happy Friday the 13th! Wonder if this will be a lucky day for everyone. Or, will we get the usual Friday sell-off? Regardless, I see faint and early signs that we may be bottoming out here. Practically all the stocks indices have successfully bounced off their 200-day moving average levels, which is typically the last line of defense for the bulls. We may still see some back and forth for a bit, but I believe the bulls are re-gaining control. Although the volatility can make you crazy watching the wild price swings, the fact of the matter is, is that our put-option positions are losing value every day. That's good! If the stock prices just end up back in the middle of the large price swings, that works in our favor, as they are keeping above our strike prices, and time decay keeps eroding their value. Time decay is a very powerful force when it comes to option selling. It's basically our best friend. Even if we don't always get the stock direction we need, we can always count on time decay to help our cause. Big Lots (BIG) Our BIG $40 strike put-sell position expires next Friday, and the stock is currently near $42 per share. As of now, it's still a race to see whether the stock will remain above $40 by next Friday. The plan will be to definitely buy this put-option back sometime early next week after we let the weekend of time decay kick in. As of now, this put option has a market of $.15 bid/$.25 offer. We opened the position with an official $.27 per contract sale price back on January 4, 2018. At the time, the stock was at $55-$56 per share. It's lost roughly $13-$14 per share since then, but yet our put option has gone down in price. That's time decay working for us. I'