Friday Update Hello Smart Option Sellers! Happy Friday! The market has rallied quite strongly from the short-term blip lower that was made last Friday. This uptrend continues the amazing "V-shaped" recovery from the depths of the December 2018 lows. Here's a current chart of the S&P 500. If you also look back at the March 1 Alert, you will see the charts I posted about the current state of the stock indices. We are once again bumping right up to heavy resistance. If the markets can get through those levels, it will be off to the upside races. If it struggles to get through the resistance, we may see another pull-back. In my opinion, it's only a matter of time until the markets blasts through. On the S&P 500, the line in the sand is roughly the 2815-2820 area. Keep an eye on that area as it is make-or-break. As mentioned in the past few alerts, with this incredible rally, good opportunities to sell put options (new trades) is slim at the moment. With the combination of rising stock prices and falling volatility (VIX), it's hard to justify new trades here. They would be less-than-stellar and not worth putting our money on the line. We did have a new trade last week on Gap, Inc. (GPS), whose stock price has bucked the overall up-trend and continued to move lower since we entered the put-sell play. If you have not entered that trade yet, you can still do so at good prices. So for now we continue to sit, wait and watch for better opportunities to present themselves. Update on BIG Lots (BIG) For anyone who made the hedge trade last week by buying the short-term March 15, 2019 $30 put option - you will see it expire worthless today with no value. Based on the prior earnings bomb BIG dropped on us, it made sense to at least take a stab at protecting ourselves to the same situation. But since BIG stock rallied hard after last week's earnings, the hedge trade died very quickly. The upside to the situation is that our July 2019 $30 put-sell position has decayed quite a bit too, and now we wait for it to decay even more. The wildcard to all of this is that we need BIG stock to remain elevated. We don't want the stock to start moving lower again. Also, if anyone bought the unofficial BIG March $35 call options, you could've sold those out over the last week for decent gains. Every once in awhile we have a position that needs a little maintenance that will include adjustments such as rolls and hedge trades. In the end, these actions usually help to either achieve an overall gain on the trade, or a slight loss. Our fate with BIG should come to fruition over the next month or two. The rest of our positions (except for GPS) are performing nicely - all are moving in the right direction. Continue to hold all other open positions as-is. That's all for today. Contact me here with fills, comments, questions or concerns. Have a great weekend! Regards,
Lee Let's Grab That Cash!