Today, we are rolling all of our Perpetual Income Portfolio Club positions out to the Sept. 11 and Sept. 18 expirations. While I will be monitoring our positions, I will not be sending any alerts or updates until after the Labor Day holiday.
Applied Materials’ (AMAT) advance has stalled along with the rest of the chip sector, but that is not a surprise after the stock ran up 70% in the past few months. We’re going to roll our call out two weeks and down one strike, generating a good deal of cash as we do so.
Chewy (CHWY) has punched through its short-term trading range and is holding above $55. I believe shares will continue to trade well above $50, so I am recommending we roll out to the September monthly expiration, sacrificing some income so we can capture more potential appreciation.
Gilead Sciences (GILD) has settled into a short-term trading range of $65-$67.50. While this is disappointing short term, it also provides us with a more predictable set of option chains that continue to throw off a large amount of cash week by week. I am recommending we roll our call down to the 66 strike and out two weeks.
Target (TGT) is pulling back after its huge post-earnings spike but is currently holding above $150. Our put is in the money, so I am recommending we roll it out two weeks to avoid assignment and generate a lot of cash. I see shares moving higher again soon.
If you are not currently in the AMAT, GILD and/or TGT positions, you can enter them now. Just be aware that with AMAT and GILD, you will first need to buy 100 shares of the stock for every call you plan to sell to make sure your position is covered. Never sell an uncovered call.
If you are not currently in a CHWY position, please do not enter one at this time. I will alert you when it is time to initiate a position.
AMAT Aug Week Four (8/28) 64 Call
Current Stock Price: $62.72
- Buy to close the AMAT Aug Week Four (8/28) 64 Call for around $0.02
- Sell to open the AMAT Sep Week Two (9/11) 63.50 Call for around $1.52
- Set your initial credit limit at $1.50, but adjust as needed to roll today
CHWY Aug Week Four (8/28) 50 Call
Current Stock Price: $59.69
- Buy to close the CHWY Aug Week Four (8/28) 50 Call for around $9.75
- Sell to open the CHWY Sep Monthly (9/18) 52.50 Call for around $8.70
- Set your initial debit limit at $1.05, but adjust as needed to roll today
GILD Aug Week Four (8/28) 67 Call
Current Stock Price: $65.19
- Buy to close the GILD Aug Week Four (8/28) 67 Call for around $0.01
- Sell to open the GILD Sep Week Two (9/11) 66 Call for around $0.89
- Set your initial credit limit at $0.88, but adjust as needed to roll today
TGT Aug Week Four (8/28) 152.50 Put
Current Stock Price: $150.46
- Buy to close the TGT Aug Week Four (8/28) 152.50 Put for around $2.20
- Sell to open the TGT Sep Week Two (9/11) 152.50 Put for around $4.10
- Set your initial credit limit at $1.90, but adjust as needed to roll today
Disclosure: I have positions or trade in and out of AMAT, CHWY, GILD and TGT.