Unofficial Trades! Hello Smart Option Sellers! Happy Friday! Ok, since I cannot seem to find worthy put-sell trades at the moment, I will offer up some unofficial trades for those of you looking for action. These trades are completely optional and will not be tracked by us. Nike (NKE) The only reason why this trade is unofficial is due to NKE's stock price, which currently sits near $100. We look for stocks $50 and under in our service. Here's the current chart. Earnings were released yesterday and the stock is down $1.40 as I type. This is a well-needed minor pull-back. NKE is one of the most widely recognized brands in the world and has had an amazing run over the last 10 years. I don't see any reason why it would stop now. If you are bullish on NKE, and would like to get onboard, you can consider this put-sell trade. Here's what you can choose to do: Sell (sell-to-open) the NKE April 17, 2020 $75 or $77.50 put options at current prices as an opening transaction (sell-to-open). Currently, the $75 put option has a market of $.20 bid/$.23 offer and the $77.50 put options have a market of $.28 bid/$.31 offer. You make the choice on which strike to choose. Or maybe, do a combination. If you get involved, manage it the same way as you would for any official Smart Option Seller recommendation. Walmart (WMT) This trade is a bit different, so please pay attention and only get involved if you understand how it will work. I am extremely bullish on WMT, and it's just itching to break out higher. Here's the current chart. It has been meandering in such a tight range over the last few months, that once the breakout occurs, it should be very explosive. I believe that explosion will happen on the upside. If you agree with that assessment, and are bullish on WMT, this trade might intrigue you. It's a no-cost bullish play that includes selling an out-of-the-money (OTM) put option and buying an OTM call option. It is doubly bullish and called a "fence". Here's what you can choose to do: Sell (sell-to-open) the WMT March 20, 2020 $$110 put option and buy (buy-to-open) the WMT March 20, 2020 $130 call option at current prices. The key here is that you want to try to do this whole trade (both the call and put) for no cost. This means that the put option should be sold for more than what the call option costs. At the moment, the put option has a market of $1.15 bid/$1.17 offer, and the call option has a market of $1.02 bid/$1.05 offer. By selling the put option near $1.16 and buying the call option for $1.04, you would receive a credit of $.12 per spread ($1.16 - $1.02 = $.14). Selling the $110 put option is no different than what we normally do at Smart Option Seller. It has a $10.45 cushion below WMT's current stock price of $120.45. The twist is that you're also buying a call option to take advantage of the eventual breakout (if it occurs). As you know, selling put options will require a margin requirement, and if WMT drops below $110 by March, you will have to buy the stock at $110 per share. Make sure this is something you are okay with. On the upside, if WMT rallies, the put option will create a profit, and the call option will offer unlimited profit potential. If WMT remains anywhere between $110 - $130 by expiration, both options will expire worthless, but you'll still walk away with the $.12 per spread gain. No harm, no foul. If WMT moves below $110 by expiration, the puts will be assigned and the call option will expire worthless. If WMT moves above $130 by expiration, the profit potential is unlimited. The best case scenario is for WMT to blast higher. This "fence" trade is a professional type of strategy. Please consider your risk tolerance and directional outlook on WMT before diving in. It is geared for a bullish outlook. If there are any questions, I will be more than happy to go over it on Monday. For more information on the fence trade, read my two blog posts here and here That's all for now. Continue to hold all other open positions as-is. Have a great weekend! Contact us here with fills, comments, questions or concerns. Regards,
Lee Let's Grab That Cash!