We have three new positions this week, which I introduced in today’s Perpetual Income Portfolio Club Live Trading Session. You can watch a recording of the session here.
Our Applied Materials (AMAT) and Target (TGT) puts expired worthless on Friday, so we are selling new puts on these names today.
I am also recommending we roll our Gilead Sciences (GILD) call to a lower strike. If you are not currently in this position, you can enter it today by selling the lower-strike call. Just be sure to buy 100 shares of the stock first for every call you plan to sell. Never sell an uncovered call.
No action is needed on our Chewy (CHWY) Aug Week One (8/7) 49 Call at this time
Current Stock Price: $64.97
Action: Sell to open the AMAT Aug Week One (8/7) 64 Put
Current Option Price: $0.67-$0.70
Recommended Limit: Set your initial limit order at $0.68
GILD Aug Week One (8/7) 80 Call
Current Stock Price: $71.23
- Buy to close the GILD Aug Week One (8/7) 80 Call for around $0.02
- Sell to open the GILD Aug Week One (8/7) 72.50 Call for around $0.36
- Set your initial credit limit at $0.34, but adjust as needed to roll today
Current Stock Price: $127.30
Action: Sell to open the TGT Aug Week Two (8/14) 125 Put
Current Option Price: $1.36-$1.46
Recommended Limit: Set your initial limit order at $1.41
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, GILD and TGT.