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Another Unofficial Trade...

Another Unofficial Trade... Hello Smart Option Sellers! We left off last Friday discussing the potential outcome of the G-20 summit and whether President Trump's meeting with China's leader XI Jinping would cause a rally or a drop in the stock markets. Well, apparently, the market was very pleased with the talks, as both leaders agreed to keep the lines of communication open and try to forge ahead with new discussions on trade and tariffs. Although the early enthusiasm waned a bit by the end of yesterday's trading session, we still saw a healthy upswing. Tomorrow, the markets will be open for a half day, and then closed on Thursday for the July 4th holiday. I don't have any new trades for us, but I can offer up another unofficial trade. For those of you who were able to jump into last week's unofficial put-sell trade on Paypal (PYPL) - it is already paying off as the stock has jumped and the put option price has fallen. Congrats (so far) to those of you who entered. I have another unofficial offering today as well, for those who may be interested. Unofficial Trade - Automatic Data Processing (ADP) ADP is a great company with a great looking stock chart. See here. In addition to its long up-trending chart, the stock is part of the "Dividend Aristocrat" list that I love so much. Dividend Aristocrats are that cream of the crop that have consistently raised their annual dividend every year for at least 25 years. ADP has done so for 44 years running. Companies that raise their dividends for that long a period are stalwarts of their sector and have the confidence that their business will not disappoint. Today, ADP is giving us a gift as the stock has dropped $6.50 per share, making a short-term put-sell very attractive. The reason for the stock drop? The only thing I'm finding is a story about an 8 million share block of stock being offered for sale through Jeffries' brokerage house at $161 to $163 per share. This is lower than where ADP closed yesterday and there's no story behind why it's happening or who's selling. A large sale block like this can mean lots of different things for the company selling them. Maybe they want to take some profits and not go through the regular stock market, knowing their large sale would've pushed the price down anyway. Or, they're raising cash to raise their own dividend, or to buy back their own company's stock. Anyway, I'm not finding any fraud or lawsuit-related stories, which would give me pause. So, if you want to take a quick stab at a solid company, the unofficial trade is below. And please do your own due diligence as well. Here's what you can choose to do: Sell (sell-to-open) the ADP August 16, 2019 $125 put options for a limit sell price of $.25 per contract or higher, as an opening transaction (sell-to-open). Currently, this put option has a market of $.20 bid/$.30 offer, and $.25 has already traded today, so there's a good chance more fills could go through at $.25 per. With ADP stock near $160 per share, this trade will have $35 of downside cushion, which equates to a 21.8% buffer. That's great protection for such a short-term trade. ADP's earnings come out on July 31, so it gives enough time for the stock to rally back up and for the options to decay in price. Remember, this is an unofficial trade, so we won't be tracking it in the portfolio. If you get involved, stay within your comfort zone and use my "80% Rule" guide for profit-taking. Ok, that's all for now. Continue to hold all other open positions as-is. Contact us here with fills, comments, questions or concerns. Regards,

Lee Let's Grab That Cash!

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