Big Drop...New Trade!
Big Dop...New Trade! Hello Smart Option Sellers! Happy Friday! Let's get cracking with a new trade. As we've done recently, we're going to jump into a new trade on a stock in which we already have a position. We're just moving it out a few months. Intel Corp (INTC) Intel released earnings after the close yesterday and the market wasn't impressed. The stock is currently off $4 per share to a level of $48. We currently have a put-sell position on INTC for the October 2018 $37 puts, which are in the green for us at the moment. You would think that if a stock drops $4 per share, the put options would bounce. That's true, but it also depends on how much time is left before expiration. Our October put-sell position hasn't flinched on the stock's down-move and is still hovering around $.15 per contract, unchanged from yesterday. Also, in the days leading up to an earnings announcement, all of the options contracts (calls & puts) get pumped up to more expensive levels than usual as the option market-makers don't know how the stock is going to react to the earnings call. In order to protect themselves against potential extreme adverse moves, the option market-makers will pad the option prices. Once the earnings are announced, the "air" is let out of the options the next trading day, so you actually won't get as much movement from the option prices as you would expect. Anyway, we're going to hop into a secondary INTC put-sell to take advantage of the current down-move. You know how I love it when quality stocks drop temporarily. Here's what you can choose to do: Sell (sell-to-open) the INTC January 18, 2019 $35 put options for a limit sell price of $.25 per contract or higher, GTC, as an opening transaction (sell-to-open). Currently, this put option has a market of $.29 bid/$.30 offer, so we should have no problem getting them dome right off the bat for prices higher than $.25 per. I believe we'll see some follow-through selling on INTC stock, which should keep the put option prices elevated for the next few sessions. With the stock at $48, it gives us a $13 downside cushion above the $35 strike price, which is roughly 27%. That's a great safety net for us. Get those orders in there and let us know how you do. I'll have the SVU buy-back results from yesterday and the Q&A session to you a bit later. That's all for now. Continue to hold all other positions as-is. Contact me here Regards,
Lee Let's Grab That Cash!