New Trades! And Yesterday's Trade Results
New Trades! Hello Smart Option Sellers! Before we get to yesterday's trade results, I have two more new trades to consider. CVS Health (CVS) Now that Walmart (WMT) has agreed to remain within CVS's pharmacy network, I feel confident about jumping into a new put-sell trade on CVS. Its share price sits near $64.75 and has fallen about $20 from its highs reached before the December sell-off. Here's the current chart. We'll be taking a new put-sell trade with another $17 of downside cushion, which represents a 26% buffer. CVS reports earnings around February 6, so take that into consideration. Remember, half-size positions only! Here's what you can choose to do: Sell (sell-to-open) the CVS May 17, 2019 $47.50 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 $.27 bid/$.34 offer, so you should be able to sell these at better than $.25 per. Try to place your initial sell order in between the prevailing bid/ask spread at first. This helps to get the highest price. If you are not filled within a bit of time, you can incrementally lower your offer. Emerson Electric (EMR) One of the most solid Dividend Achievers out there. EMR has raised its dividend for an amazing 62 years straight. That's quality! We've played EMR successfully a couple of times so far and we're going back for more. Its share price sits near $62.50, and like CVS, has fallen about $20 from its highs reached before the December sell-off. Here's the current chart. We'll be taking a new put-sell trade with another $17.50 of downside cushion, which represents a 28% buffer. EMR reports earnings around February 4, so take that into consideration. Remember, half-size positions only! Here's what you can choose to do: Sell (sell-to-open) the EMR June 21, 2019 $45 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 $.25 bid/$.35 offer, so we should have no problem getting these done. Remember, place your initial sell order somewhere within the bid/ask spread instead of selling right at the prevailing bid price. This action helps to get the best fill. Get these two new orders in now and let us know how you do. Yesterday's Trade Results We went 1 for 3 yesterday on our new put-sell trades. Not the greatest average, but definitely not a concern. We chose K, NKE & KO as our targets, and as of now, KO was the lucky winner. Here's what we did: Coca-Cola (KO) Sold (sold-to-open) the KO June 21, 2019 $38 put options for an official sale price of $.25 per contract as an opening transaction (sold-to-open). Trades went across the tape yesterday evenly split between $.25 and $.26 per contract, with $.25 being our official mark. If you did not get filled yesterday, continue to work your order "GTC". We will also continue to work our two other unfilled trades from yesterday. The good thing is that these options have a decent amount of time before expiration, so if the stocks drop again, the put options should pop back up in price enough for us to see fills. Remember, as stocks drop, put option prices rise. I think we all can understand how that works, as we saw how quickly many of our open put-sell positions jumped in price during the December 2018 market swoon. So if you're concerned about possibly missing out on trades, I don't think you should be. One big sell-off will be enough to let everyone get filled. Continue to work your orders "GTC". Our unfilled trades are listed below again for reference. Kellogg (K) 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). K releases earnings around March 7, so keep that in mind. Remember half-size positions only! Nike (NKE) 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). NKE releases earnings around March 20, so keep that in mind. Remember half-size positions only! One quick note about half-size positions as some new members have asked for clarification recently. Here's part of what I said in the January 10, 2019 alert: ---------------------------- Although the market has had a nice comeback over the last week or so, I'm still a little leery of potential sell-offs. There's been lots of technical damage on the charts, and as I've said recently, the bears may not want to give up so easily. But, when we have such large down-moves, there's always opportunities to take advantage of. I'd hate to miss out on at least some of it. So, we're going to jump into a new trade today. But the caveat here is that I want everyone to play with half of your normal trade size. If you typically trade 10 contracts, then bump it down to 5 contracts. If you usually only trade one contract, then stick with that. I want us to have one foot in the door, but I want to also be aware of more potential selling. It cases like this, it's prudent to pare down your trade size. ------------------------------- All of our unfilled trades can now be seen in the current portfolio under the "pending" section. That's all for now. Look for the Friday Q&A alert a bit later today. 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!