Following Friday’s expiration, we have uncovered shares in all four of our Perpetual Income Portfolio Club stocks. That means we have four call positions to put on.
While volatility remains elevated, I do not expect to see abrupt moves in that market that disrupt our positions like we have witnessed lately.
If you are not currently in the Chewy (CHWY) and/or General Motors (GM) positions, you can enter them today. Just be aware that you must first buy 100 shares of the underlying stock for every call you plan to sell to make sure your position is covered. Never sell an uncovered call.
If you are not in the Apple (AAPL) and Twitter (TWTR) positions, please sit this week out. I will alert you when it is time to put new money to work.
AAPL Uncovered Shares
Current Stock Price: $126.08
Action: Sell to open the AAPL May Monthly (5/21) 128 Call
Current Option Price: $0.68-$0.69
Recommended Limit: Set your initial limit order at $0.68
CHWY Uncovered Shares
Current Stock Price: $69.30
Action: Sell to open the CHWY May Monthly (5/21) 70 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: $1.56-$1.65
Recommended Limit: Set your initial limit order at $1.60
GM Uncovered Shares
Current Stock Price: $55.85
Action: Sell to open the GM May Monthly (5/21) 57 Call (If you are new to the position, you must buy 100 shares of GM for every call you plan to sell.)
Current Option Price: $0.40-$0.41
Recommended Limit: Set your initial limit order at $0.40
TWTR Uncovered Shares
Current Stock Price: $52.13
Action: Sell to open the TWTR May Monthly (5/21) 52.50 Call
Current Option Price: $0.90-$0.93
Recommended Limit: Set your initial limit order at $0.91
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, GM and TWTR.