Our Chewy (CHWY) call expired worthless on Friday, so we are selling a new call against our uncovered shares. If you are not currently in a CHWY position, you can enter one today. Just be aware 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.
Our Corning (GLW) put expired worthless, so I am recommending another one to sell today.
We were assigned shares of Starbucks (SBUX), so we are selling a call against them. As with CHWY, if you are new to the position, you must buy 100 shares of the underlying stock for every call you plan to sell.
Note that no action is needed on the Apple (AAPL) Mar Week Four (3/26) 125 Call at this time.
CHWY Uncovered Shares
Current Stock Price: $86.01
Action: Sell to open the CHWY Mar Week Four (3/26) 90 Call (If you are new to the position, you must buy 100 shares of CHWY for every call you plan to sell.)
Current Option Price: $0.93-$1.02
Recommended Limit: Set your initial limit order at $0.97
GLW
Current Stock Price: $41.07
Action: Sell to open the GLW Apr Week One (4/1) 41 Put
Current Option Price: $0.67-$0.87
Recommended Limit: Set your initial limit order at $0.77
SBUX Uncovered Shares
Current Stock Price: $108.01
Action: Sell to open the SBUX Mar Week Four (3/26) 108 Call (If you are new to the position, you must buy 100 shares of SBUX for every call you plan to sell.)
Current Option Price: $1.25-$1.32
Recommended Limit: Set your initial limit order at $1.28
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 AAPL, CHWY, GLW and SBUX.