We were assigned shares of Apple (AAPL) and Starbucks (SBUX) last week, so I am recommending calls to sell against them today.
If you are not currently in an AAPL and/or SBUX 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.
Our Corning (GLW) put expired worthless, so we are selling another one today.
Note that no action is needed on our Chewy (CHWY) Jan Week Five (1/29) 108 Call at this time.
AAPL Uncovered Shares
Current Stock Price: $127.13
Action: Sell to open the AAPL Jan Week Four (1/22) 130 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: $0.74-$0.75
Recommended Limit: Set your initial limit order at $0.74
Current Stock Price: $38.52
Action: Sell to open the GLW Jan Week Four (1/22) 38 Put
Current Option Price: $0.25-$0.27
Recommended Limit: Set your initial limit order at $0.26
SBUX Uncovered Shares
Current Stock Price: $101.69
Action: Sell to open the SBUX Jan Week Four (1/22) 103 Call (If you are new to the position, you must buy 100 shares of SBUX for every call you plan to sell.)
Current Option Price: $0.47-$0.49
Recommended Limit: Set your initial limit order at $0.48
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, GLW, CHWY and SBUX.