Our Apple (AAPL) call expired worthless on Friday and our General Motors (GM) shares were called away.
I am recommending a new call to sell on our uncovered AAPL shares and a put position on GM.
If you are not currently in these positions, you can enter them today. Just be aware that with the AAPL position, 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.
Note that no action is needed on our Chewy (CHWY) Jun Week One (6/4) 73.50 Call and/or Twitter (TWTR) Jun Week One (6/4) 53.50 Call at this time.
AAPL Uncovered Shares
Current Stock Price: $124.50
Action: Sell to open the AAPL Jun Week Two (6/11) 125 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: $1.58-$1.60
Recommended Limit: Set your initial credit limit at $1.59
Current Stock Price: $59.55
Action: Sell to open the GM Jun Week One (6/4) 59 Put
Current Option Price: $0.45-$0.46
Recommended Limit: Set your initial credit limit 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, CHWY, GM and TWTR.