Editor’s note: Michael is hosting a Perpetual Income Portfolio Club Live Trading Session on Monday, Oct. 5, at 11 a.m. Eastern.
If you have not already done so, register here.
Once you have registered, you will receive email reminders from our webinar provider, Zoom, prior to the session with a link to join.
Our Applied Materials (AMAT) shares were called away on Friday and our Target (TGT) put expired worthless. So, I am recommending a put to sell for each.
Note that no action is needed on the Chewy (CHWY) Oct Week One (10/2) 53 Call or Gilead Sciences (GILD) Oct Week One (10/2) 63.50 Call at this time.
Current Stock Price: $59.72
Action: Sell to open the AMAT Oct Week One (10/2) 58.50 Put
Current Option Price: $0.48-$0.51
Recommended Limit: Set initial limit order at $0.49
Current Stock Price: $157.65
Action: Sell to open the TGT Oct Week One (10/2) 155 Put
Current Option Price: $0.72-$0.79
Recommended Limit: Set initial limit order at $0.75
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.