Our Apple (AAPL) and Chewy (CHWY) puts expired worthless on Friday. I am recommending new puts to sell today.
We were assigned shares of Applied Materials (AMAT) last week and our Target (TGT) call expired worthless. Therefore, we are selling calls on these stocks today.
If you are not currently in an AMAT and/or TGT position, you will need to buy 100 shares of the stock first for every call you plan to sell to make sure your position is covered. Never sell an uncovered call.
Note that all of these positions expire on Thursday, Dec. 25, as the market is closed on Friday for Christmas. Be prepared to roll them later this week.
AAPL
Current Stock Price: $133.13
Action: Sell to open the AAPL Dec Week Four (12/24) 130 Put
Current Option Price: $0.61-$0.62
Recommended Limit: Set your initial limit order at $0.61
AMAT Uncovered Shares
Current Stock Price: $86.32
Action: Sell to open the AMAT Dec Week Four (12/24) 87 Call
Current Option Price: $0.52-$0.57
Recommended Limit: Set your initial limit order at $0.54
CHWY
Current Stock Price: $107.67
Action: Sell to open the CHWY Dec Week Four (12/24) 105 Put
Current Option Price: $1-$1.18
Recommended Limit: Set your initial limit order at $1.09
TGT Uncovered Shares
Current Stock Price: $172.39
Action: Sell to open the TGT Dec Week Four (12/24) 175 Call
Current Option Price: $0.43-$0.47
Recommended Limit: Set your initial limit order at $0.45
Note: Option prices tend to move around more than stock prices, so the prices you see when you receive this alert may be different than what I am seeing now. The most frequent concern I hear from members is “missing the trade” — i.e., not getting the limit price I recommend within a few minutes of placing the order.
It is important to be patient with these trades. Begin with my recommended limit for each trade, and if you need to adjust it slightly in a few hours to get in, you can do so.
The Perpetual Income Engine strategy involves selling options every week, so while a few pennies can be important to your short-term return, getting the trade executed is more important over the long run. Use your judgment as to when to adjust the trade after you place your initial order, but give it some time before doing so.
Disclosure: I have positions or trade in and out of AAPL, AMAT, CHWY and TGT.