Our Apple (AAPL) and Chewy (CHWY) puts expired worthless on Friday. I held off on putting on new positions on Monday and Tuesday to see if this rebound had legs. It appears it does, and I am recommending new puts to sell today that expire next week.
I am also recommending we roll our General Motors (GM) and Twitter (TWTR) positions out to the July 2 expiration.
With GM, I am looking to avoid assignment and buy ourselves some time for shares to move higher.
And with TWTR running up this week, I want to roll to a higher strike to generate additional income.
Note that there will be no PIPC Update on Friday since we have no positions expiring this week.
Current Stock Price: $133.97
Action: Sell to open the AAPL Jul Week One (7/2) 132 Put
Current Option Price: $0.89-$0.90
Recommended Limit: Set your initial limit order at $0.89
Current Stock Price: $78.92
Action: Sell to open the CHWY Jul Week One (7/2) 76 Put
Current Option Price: $0.98-$1.04
Recommended Limit: Set your initial limit order at $1.01
GM Jun Week Four (6/25) 61 Put
Current Stock Price: $60.20
- Buy to close the GM Jun Week Four (6/25) 61 Put for around $1.06
- Sell to open the GM Jul Week One (7/2) 61 Put for around $1.60
- Set your initial credit limit at $0.54, but adjust as needed to roll today
TWTR Jun Week Four (6/25) 60 Put
Current Stock Price: $66.07
- Buy to close the TWTR Jun Week Four (6/25) 60 Put for around $0.06
- Sell to open the TWTR Jul Week One (7/2) 65 Put for around $1.11
- Set your initial credit limit at $1.05, but adjust as needed to roll today
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.