A Trio Of New Trades!
A Trio Of New Trades! Hello Smart Option Sellers! Ok, time to get busy! As mentioned in last week's alert - although I'm impressed with the rally we've seen since December 26, 2018, I'm still wary of the bears not giving up so easily. I want us to get a foot in the door and hop into some new trades to at least have some kind of exposure, but with using half positions only. We recently placed a put-sell order on the HACK June 21, 2019 $26 put options which has not been filled yet (except for a lone 10-lot by one of our members). We'll continue to work that one for the time being. But... I've found three new trades for us today. So let's get right to it. Kellogg (K) Yes, we just closed out a successful trade on K two days ago, but with the amount that this quality stock has fallen, it makes sense to give it another go. We will be able to use a strike price with lots of downside cushion. Here's what you can choose to do: Sell (sell-to-open) the K June 21, 2019 $42.50 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 $.15 bid/$.40 offer - a little wide for my liking, but we'll be putting in a $.25 offer, so let's see if someone bites. There's no guarantee that we'll get filled, but if we have another down-move in the near future, it should work in our favor. With K stock near $58.75 at the moment, we're getting a solid $16 cushion above the strike price which equates to a 27% buffer. Here's the current chart. We're coming up on earnings season for all our trades today, with K releasing on February 7. Remember half-size positions only! Nike (NKE) Another stock that we also recently closed out for a profit. I have no qualms about recycling trades over and over. If it works, then we'll keep exploiting it. Here's what you can choose to do: Sell (sell-to-open) the NKE April 18, 2019 $60 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 $.23 bid/$.26 offer, so let's see if we can get these done. If not filled right away, just keep your order working "GTC". With NKE stock near $78.60 at the moment, we're getting a solid $18.60 cushion above the strike price which equates to a 23.6% buffer. Here's the current chart. NKE releases earnings around March 20, so keep that in mind. Remember half-size positions only! Coca-Cola (KO) A first time entry of this stock to The Smart Option Seller. I'm excited to give this one a go. Here's what you can choose to do: Sell (sell-to-open) the KO June 21, 2019 $38 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 $.24 bid/$.28 offer - so I'm hoping we can squeeze this one out at least $.25 per. With KO stock near $47 at the moment, we're getting a good $9 cushion above the strike price which equates to a 19% buffer. I've looked at the long-term chart of KO and it is very rare for the stock to move $9 (up or down) in a five month time frame. I feel really good about this trade. Here's the current chart. KO releases earnings on February 14, so keep that in mind. Remember half-size positions only! Alcoa (AA) Here's a follow-up for anyone who took the optional and unofficial hedge trade on AA yesterday. AA's earnings were mostly inline with expectations and the stock has been fluctuating above and below yesterday's close, with it currently trading at $29.60, up $.60 on the day so far. Obviously, any of the put options that were bought as a hedge will have very little value today, and most likely will expire worthless tomorrow. Your best bet is to just hang onto them and let them go out on their own. If for some crazy reason AA starts to tank, then maybe the put options can be sold tomorrow for some value. Just keep an eye on it until then. It was a smart play to spend a few bucks just in case AA bombed its earnings and the stock got creamed. In the end, having the stock rally is better for our July put-sell position. Get all your orders in there now and let us know how you do. That's all for now. Continue to hold all other open positions as-is. Contact me here with fills, comments, questions or concerns. Regards,
Lee Let's Grab That Cash!