Our Applied Materials (AMAT), Chewy (CHWY) and Target (TGT) puts expired worthless last week. I am recommending new positions on each. Since this is going to be a very light trading week, we are going out to the Dec. 4 expiration, which will allow us to generate more cash. Note that I will not be sending a PIPC Update on Friday.
Our Gilead Sciences (GILD) shares were called away on Friday. We will not be initiating a new position on the stock. Wall Street loves to hate GILD and it’s time for us to move on. I plan to replace Gilead with a new name as early as next week.
Current Stock Price: $78.63
Action: Sell to open the AMAT Dec Week One (12/4) 76 Put
Current Option Price: $0.92-$0.96
Recommended Limit: Set initial limit order at $0.94
Current Stock Price: $68.26
Action: Sell to open the CHWY Dec Week One (12/4) 67.50 Put
Current Option Price: $2.22-$2.38
Recommended Limit: Set initial limit order at $2.30
Current Stock Price: $176.35
Action: Sell to open the TGT Dec Week One (12/4) 175 Put
Current Option Price: $2.45-$2.54
Recommended Limit: Set initial limit order at $2.49
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 AMAT, CHWY and TGT.