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.
Our Gilead Sciences (GILD) call also expired worthless and we will be selling a new call against our shares. If you are not currently in a GILD position, you can enter one today. Just be sure 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.
No action is needed on our Chewy (CHWY) Oct Monthly (10/16) 55 Call at this time
Current Stock Price: $59.69
Action: Sell to open the AMAT Oct Week Two (10/9) 59 Put
Current Option Price: $0.67-$0.70
Recommended Limit: Set your initial limit order at $0.68
GILD Uncovered Shares
Current Stock Price: $63.71
Action: Sell to open the GILD Oct Week Two (10/9) 64 Call (If you are new to the position, you must buy 100 shares of GILD for every call you plan to sell.)
Current Option Price: $0.63-$0.67
Recommended Limit: Set your initial limit order at $0.65
Current Stock Price: $161.58
Action: Sell to open the TGT Oct Week Two (10/9) 160 Put
Current Option Price: $1.12-$1.17
Recommended Limit: Set your initial limit order at $1.14
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.