Our Applied Materials (AMAT) put and Target (TGT) call expired worthless on Friday, so we will be putting on new positions today.
If you are new to the TGT position, remember that you will need 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.
Note that no action is needed on our Chewy (CHWY) Jul Monthly (7/17) 48 Call or Gilead Sciences (GILD) Jul Monthly (7/17) 78 Call at this time.
Current Stock Price: $61.33
Action: Sell to open the AMAT Jul Monthly (7/17) 60 Put
Current Option Price: $0.58-$0.61
Recommended Limit: Set initial limit order at $0.59
TGT Uncovered Shares
Current Stock Price: $118.79
Action: Sell to open the TGT Jul Monthly (7/17) 120 Call
Current Option Price: $0.84-$0.91
Recommended Limit: Set initial limit order at $0.87
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.