We have three new positions this week, which I introduced in today’s Perpetual Income Portfolio Club Live Trading Session. You can watch a recording of the session here.
Our Apple (AAPL) call expired worthless on Friday and we were assigned shares of Chewy (CHWY). I am recommending calls to sell today.
If you are not currently in these positions, you can enter them now. Just be sure to purchase 100 shares of the underlying stock first for every call you plan to sell. Never sell an uncovered call.
I am also recommending a put to sell on Starbucks (SBUX).
Note that no action is needed on our Corning (GLW) Mar Monthly (3/19) 40 Put at this time.
AAPL Uncovered Shares
Current Stock Price: $118.13
Action: Sell to open the AAPL Mar Week Two (3/12) 120 Call (If you are new to the position, you must buy 100 shares of AAPL for every call you plan to sell.)
Current Option Price: $1.54-$1.56
Recommended Limit: Set your initial limit order at $1.55
CHWY Uncovered Shares
Current Stock Price: $82.07
Action: Sell to open the CHWY Mar Week Two (3/12) 85 Call (If you are new to the position, you must buy 100 shares of CHWY for every call you plan to sell.)
Current Option Price: $1.54-$1.83
Recommended Limit: Set your initial limit order at $1.68
Current Stock Price: $106.32
Action: Sell to open the SBUX Mar Week Two (3/12) 105 Put
Current Option Price: $0.76-$0.81
Recommended Limit: Set your initial limit order at $0.78
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, CHWY, GLW and SBUX.