Market Update Hello Smart Option Sellers! Clearly we are not done yet with the market selling. It can be swift, fierce and unrelenting. It's also very scary to watch. If you've been a market participant for many years, the pattern is typical - months and months of upside action is wiped out in just a few short days. It's always faster on the down-move than the up-move. That's because everyone hits the exits and panics at the same time. But just when it seems to be at its worst, that's when cooler heads prevail and the rallies can occur (happening as I type). This is also why there's no need for us to panic with our trades. Yes, our put-sell positions are underwater at the moment, but every stock price still trades above the strike price. Remember, as long as the stock price remains above the strike price, we won't have to do anything. The question is: are you still comfortable potentially buying the stock if it comes down to that? AMD Sells Off AMD released earnings after the close yesterday and was knocked for a loop. It's currently down close to $3.50 per share, and trading near $19.50. That's a full $8.50 below its price when we jumped on the put-sell trade a few weeks ago. Sure, when we sold the $15 put options, the stock was at $28 per share. We felt really good about that $13 cushion. But now that the stock has dropped below $20, it seems more of a possibility that we could eventually buy the stock at $15 per share. Are you still comfortable with that? When selling put options like I do for Smart Option Seller, it's my goal to not only engage with top quality stocks, but it's also important for me to pick desirable levels to potentially purchase these stocks. If we want to build a long-term portfolio of quality stocks, it's best to scale in at low levels relative to where the stock has been in the past. Yes, it may feel like everything is going down the tubes and feel like it will continue unabated. But it won't. Remember, stocks are actual companies that create actual products, and produce actual profits. If these companies stay on the path of profitability, they will rebound. What we're seeing now is a well-needed bout of profit-taking and selling by late-comers and weak hands. This is healthy. What's Our Plan? My advice to all you is to take inventory of the put options that you've sold, make sure your account funds can cover the margin requirements, and that you genuinely have an interest in potentially purchasing the stocks that I've chosen. Your account will show a paper loss at the moment. This is what happens when stocks move lower. I know many of you might not want to buy the shares, and we've operated that way since inception (even during The Instant Money Trader days). But I've always said - there WILL come a day when we buy some stock. And it will be great! On the flip-side, we certainly can take defensive measures with our positions in the form of "rolling" the trades. But we haven't gotten to that point yet. In the case of AMD for example - if we want to be defensive and buy it at a potentially lower level than $15, then we can roll the trade down to the $12 or $13 level if we'd like to. How do we do that? Well, we'd buy back the $15 put options (which would lead to a loss), and then re-sell the $12 or $13 put options with a further-out expiration date for the same price that we had to pay for the $15 put options. By doing so, we'd offset the loss, and now we'd have a new put-sell position at an even lower strike price than we originally started with. This buys us more time and gives us more downside cushion, and can still lead to an overall win on the trade. The only constraint is that we'd be stretching the trade out further in time. But, that's what would need to be done to keep us safe and away from being assigned the shares. Let's keep our powder dry for now and stay the course. I'm here manning the screens and looking for the best new opportunities for us. They exist, and I'm just waiting for the signal to jump in. With the volatility high, timing needs to be a bit more precise. That's why I'm being extra cautious. That's all for now. Continue to hold all other positions as-is. 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!