Market Update Hello Smart Option Sellers! Not much going on this week as far as new trades go for us. The markets have been quietly tagging all-time new highs of late, with the last one happening on Tuesday. We have since backed off a touch. Earnings season is winding down, so I don't expect many more fireworks or lots of new opportunities to jump into new plays. But I'm always here watching... Unofficial Trades Although I don't have anything new for us, I can offer two unofficial trades for those that might like to take a look. Walmart (WMT) Yes, WMT is one of my favorite stocks, and based on its chart activity, and the fact that Target (TGT) just crushed earnings the other day, I have to believe WMT is destined to shoot higher for the foreseeable future. WMT released earnings as well last week and shot up $5 per share. It has since given back those gains (I don't know why), but I believe it's a gift for anyone willing to get long on the stock. Here's the current chart. With the stock near $119.25 at the moment, I believe shooting north of $125 within the next few weeks is in the cards. But, knowing that anything can happen, and timing could be off, selling out-of-the-money (OTM) put options can help with downside cushion and directional error. Since WMT's price tag is outside of our official comfort level, I can offer up an unofficial trade for those who want in. Here's what you can choose to do: Sell (sell-to-open) the WMT March 20, 2020 $90 strike put option contract 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 $.26 bid/$.32 offer, so it can definitely be sold for better than $.25 per contract. Remember, this is an unofficial trade so I won't be following it. If you get involved, use the "80% Rule" to guide your profit-taking goals, and also use whatever stop-loss methods are in your toolbox in case the stock falls. Gap Inc. (GPS) I mentioned the other day that GPS is reporting earnings after the bell today. We recently closed out a trade on GPS for a small loss that still irks me. Regardless, there may be an opportunity to capitalize on any large move that the stock makes during tomorrow's session. Since the company pre-announced new forward guidance a few weeks ago, which caused us to close the trade earlier than I wanted, the earnings move could be muted though if the results are inline. So, if you want to hop into this unofficial trade, please play with "fun" money and don't go hog wild. These trades are only good for today, so do not try to enter tomorrow. GPS has a history of gapping open higher or lower after earnings for as much as $5 per share. So if making these trades, you want to concentrate on strike prices that are within that $5 radius. I've offered up these types of trades before and they are called "strangles". You will be buying them, not selling them. You can choose either tomorrow's expiration date (11/22/19) or next Friday's expiration (11/29/19). Up to you. Here's what you can choose to do: Buy (buy-to-open) either the GPS November 22 or November 29, 2019 $14.50 put option and $17.50 call option (strangle) for a limit buy price of $.50 total price, as an opening transaction (buy-to-open). Since there is no way to know which way the stock might move after earnings are announced, you want to purchase both a put option and a call option. Right now, each option is worth about $.21 per contract for the 11/29/19 expiration, making the strangle worth about $.42 total (less than the $.50 instructions). The options expiring tomorrow are worth about $.26 total strangle price. You need to decide if you want more time to see the trade possibly play out. Remember, these are unofficial trades and must be opened today. Don't try to open them tomorrow. Although I won't be tracking them, I will check in tomorrow in case there's a large move. 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!