Monday Update - GPS

Monday Update - Gap, Inc (GPS) Hello Smart Option Sellers! Hope everyone had a good weekend. Well, it's official. We've finally taken possession of our first stock through the assignment process. If you still had the GPS September 20, 2019 $18 put-sell position in your account on Friday, then you now own 100 shares of GPS for every put option contract you held short. You should now see the shares in your account and the cost to buy those shares has been debited from your account funds. None of this should be new or surprising information, as I had discussed this exact scenario all last week. On Friday, we had also placed a buy-back order on this position to see if we could've closed it out instead of taking possession of the stock. We were close, but the trade never materialized. If you were watching the market and the news on Friday around 1:12pm ET, GPS stock had been trading near $17.85 per share, and our opportunity to buy the put option back was getting closer. But then the bottom fell out. Apparently a Chinese delegation that was in the U.S. to discuss agricultural tariff issues between the two countries was cut short as the delegation decided to cancel their visit to Montana. This one news item completely sank the market as a whole, and it took GPS shares down with it, essentially wiping out our chance to possibly close out the $18 put-sell position. So with that, we now own the shares. What's Next? It's time to move onto phase two of our plan. I had always discussed what would come next if we ever took ownership of the stock. We'll be implementing a "covered call" strategy which places another infusion of cash into our accounts, while at the same time protects us against temporary downside action in the stock. I will give details on how it all works and how it can benefit us in a follow-up alert, but first, let's execute the actual trade so we can get it done and out of the way. Two important details: 1. You will only execute the covered call trade if you now have the shares of GPS in your account. 2. You will sell one (1) covered call contract for every 100 shares of GPS stock that you own. So for example, if you now have 300 shares, you will sell three (3) call option contracts. If you own 500 shares, you will sell five (5) call option contracts. This is very important to know. With that, here's what you can choose to do: Sell (sell-to-open) the GPS December 20, 2019 $17 call option contracts for a limit sell price of $1.40 per contract or higher, GTC, as an opening transaction (sell-to-open). With GPS stock now near $17.25 per share, this call option contract has a market of $1.50 bid/$1.60 offer, so we should be able to get these sold for at least $1.40 or higher (selling at $1.50 is better than selling at $1.40!) Remember, make sure you check the bid/ask prices before placing your order so you know where the market is. You can always place your sell offer at a price in between the bid/ask if you want a better fill. Keep yourself informed! Don't blindly make the trade without knowing the information that can help you. Get those orders in now and let us know how you do. That's all for now. I'll be sending another alert soon. 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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