Profit Results - BIG & GSK

Profit Results Hello Smart Option Sellers! Yesterday was a good day for us. We locked in two profitable plays. And if you didn't get your orders in, you can still do so today at great prices. Here's what we did: GlaxoSmithKline (GSK) Bought back (bought-to-close) all of the GSK June 15, 2018 $31 put options for an official buy price of $.05 per contract as a closing transaction (bought-to-close). Some of you wrote to me that you even did better than $.05 per. Some were able to buy at $.03 and $.04 per contract. Well done! Here are the profit details: We originally established (sold-to-open) this put option on February 2, 2018 for a sale price of $.28 per contract, and now we took gains by buying it back (bought-to-close) for $.05 per contract. With the fill at $.05, it locked in a gain of $.23 per contract ($23 for every contract traded) and a return on margin (ROM) of roughly 3.7% in two and a half month's time. If you like to annualize, that's roughly a 17.7% return. To understand how the margin works and the calculations involved, here's the breakdown: Whenever we sell an option contract, your broker will require you to maintain a "margin requirement". The margin requirement is made up of funds that are already in your account and will need to be held aside while the trade is active. You are not borrowing money from anyone nor are you paying interest to anyone. Some people can confuse the margin requirement with "trading on margin". They are completely different concepts. We are not "trading on margin" when selling put options (read my margin primer in the members-only section of the website). The margin requirement is typically 20% of what it would cost to buy 100 shares of the stock at the strike price. In this case: 20% x $3,100 = $620. Your specific margin requirement at your broker may be higher or lower than that. If you are unsure, just ask them. So for this trade, our margin requirement is $620 per each put option contract sold. Our profit on this trade turned out to be $23 per each put option contract sold. Hence, the return on margin (ROM) comes out to $23/$620 = 3.7%. Also, the fill at $.05 allowed us to capture 82% of the full profit potential ($.23 gain/$.28 full potential = 82%). When selling options (puts or calls), your full profit potential is capped at what you initially sell the option for. In this case, that amount was $.27 per contract. We like to close trades early (buy-to-close) before expiration when we can capture at least 80% of the full profit potential. This is called my "80% Rule". Locking in early wins is just smart money management and it allows us to free up cash to put towards new trades. Congrats all! Big Lots (BIG) Ahhh, could've waited another day on this one in order to see better results. But hey, we locked in gains and still a great trade for us. Here's what we did: Bought back (bought-to-close) all of the BIG April 20, 2018 $40 put options for an official buy price of $.10 per contract as a closing transaction (bought-to-close). If you didn't get your order in yesterday, you can easily buy it today for $.05 per contract, as that's where the offer price stands at the moment. Here are the profit details: We originally established (sold-to-open) this put option on January 4, 2018 for a sale price of $.27 per contract, and now we took gains by buying it back (bought-to-close) for $.10 per contract. With the fill at $.10, it locked in a gain of $.17 per contract ($17 for every contract traded) and a return on margin (ROM) of roughly 2.1% in three and a half month's time. If you like to annualize, that's roughly a 6.85% return. To understand how the margin works and the calculations involved, here's the breakdown: Whenever we sell an option contract, your broker will require you to maintain a "margin requirement". The margin requirement is made up of funds that are already in your account and will need to be held aside while the trade is active. You are not borrowing money from anyone nor are you paying interest to anyone. Some people can confuse the margin requirement with "trading on margin". They are completely different concepts. We are not "trading on margin" when selling put options (read my margin primer in the members-only section of the website). The margin requirement is typically 20% of what it would cost to buy 100 shares of the stock at the strike price. In this case: 20% x $4,000 = $800. Your specific margin requirement at your broker may be higher or lower than that. If you are unsure, just ask them. So for this trade, our margin requirement is $800 per each put option contract sold. Our profit on this trade turned out to be $17 per each put option contract sold. Hence, the return on margin (ROM) comes out to $17/$800 = 2.1%. Also, the fill at $.10 allowed us to capture 63% of the full profit potential ($.17 gain/$.27 full potential = 82%). When selling options (puts or calls), your full profit potential is capped at what you initially sell the option for. In this case, that amount was $.27 per contract. We like to close trades early (buy-to-close) before expiration when we can capture at least 80% of the full profit potential. This is called my "80% Rule". We didn't quite hit the 80% threshold in this case, but a win is a win! Congrats again to all! Quick Market Update: I'm encouraged by what I've seen in the overall markets the last few days, and we could be turning the corner for more sustained upside movement. Earnings season has begun and the results are forecast to be exceptionally good. Trying to pick bottoms successfully is hard, as you never want to be too early, as that can fail on you. It's better to wait for signs that the upside has begun before jumping back in. Yes, you may miss buying the very bottom and being able to boast to your friends, but your wallet will thank you for it if you wait for the real move to begin. I feel confident that we can hop into new put-sell plays in the very near future and attain great results fairly quickly. Stay tuned! That's all for now. 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!

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