Another Position Update - GPS

Another Position Update - Gap (GPS) Hello Smart Option Sellers! As the volatility continues to roll on during August, we're seeing much larger daily price swings in the markets. Is that a bad thing? Not always. Since volatility is one of the determinants of an option's price, we can be sure that when volatility increases (like it is now), the price of an option will increase, and vice versa. The VIX is a great measure of the overall volatility in the stock indexes. Click here to see a current chart of the VIX. Each individual stock on the other hand, has its own volatility component which affects the prices of that stock's specific options contracts. You can view volatility charts for any stock at a site such as When volatility rises, put option (and call option) prices rise, too. That's usually good for us as we can sell the put options at higher rates. On the other hand, for put-sell positions that we already have in place, rising volatility and falling stock prices can lead us to temporarily larger paper losses. This is what's currently happening.with our position in GPS. So What Are We Going To Do? Obviously, many of you who hold the GPS put-sell position have been asking what the plan will be. We currently hold the September 20, 2019 $18 put-sell position, and, we purchased the August 30, 2019 $15 put option last week as a hedge against GPS' earnings report that covered us in case of a huge melt-down. Well, GPS stock initially recovered back to the $18 level last week, but has since been giving up ground again and trades near $15.90 as I type. If the stock stays above $15 by the end of this Friday's trading session, our hedge trade will expire with no value and we'll take a loss on it. At that point, we will have no more protection during the time span until expiration on September 20, 2019. If GPS stock remains below $18, we are going to be prepared to