Trade Update - GPS

Trade Update - Gap Inc. (GPS) Hello Smart Option Sellers! Despite my little memory lapse about our prior GPS put-sell position, we were successfully able to enter the new GPS put-sell trade yesterday (and some of you today). All of the trades executed yesterday (and today so far), went across the tape at $.25 - $.28 per contract, so we'll take the official mark at $.26 per. Here's what we did: Sold (sold-to-open) the GPS December 21, 2018 $21 put options for an official sale price of $.26 per contract as an opening transaction (sold-to-open). If you have not placed your trade yet, make sure to work it "GTC" at $.25 per contract or higher. Option Pricing Let's talk about option pricing for a moment, as many of you write to me about how fast the put option trades move out of range. I'm very aware of the fact that our trades move fast, and that sometimes not everyone can get onboard. There are a few reasons for that. Most of you might think it is a function of having too many people cramming into the same trade at the same time. That is certainly part of the equation - in the very short-term - but it's not the overpowering reason. One of the biggest culprits of the option prices moving out of range quickly is due to smaller volume size compared to stock prices. Most stocks will have thousands, and tens of thousands of shares, on the bid & offer. Option markets are just not as deep. There are usually only hundreds (and sometimes thousands on very popular stocks) on the bid & ask at all times. And once those volumes are taken out, the bid & offer prices start to move against us. Option market volumes will never be as deep as stocks. Supply and demand will dictate, and if we have too much supply on the sell-side, the bids start getting lower. We all see that happen. Not much we can do about it. But when the initial wave of our orders gets done, you will start to see the option prices creep back to where they should be. My recommendation for this situation is if you feel you are late to the party (and that's if you read my alert hours after I send it), then it's probably best to wait a day or two until the initial push of orders has subsided. If the stock price starts to move lower at that point, the put option price will jump bac