Our Chewy (CHWY) and Twitter (TWTR) puts expired worthless last week, so I am recommending new puts to sell today.
And we accepted shares of General Motors (GM), so I am recommending a call to sell. If you are new to the GM position, you must first buy 100 shares of the stock 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 Apple (AAPL) Apr Week Four (4/23) 126 Call at this time.
Current Stock Price: $80.09
Action: Sell to open the CHWY Apr Week Four (4/23) 77 Put
Current Option Price: $0.79-$0.83
Recommended Limit: Set your initial limit order at $0.81
GM Uncovered Shares
Current Stock Price: $57.50
Action: Sell to open the GM Apr Week Four (4/23) 59 Call (If you are new to the position, you must buy 100 shares of GM for every call you plan to sell.)
Current Option Price: $0.39-$0.41
Recommended Limit: Set your initial limit order at $0.40
Current Stock Price: $68.04
Action: Sell to open the TWTR Apr Week Four (4/23) 66 Put
Current Option Price: $0.75-$0.78
Recommended Limit: Set your initial limit order at $0.76
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, GM and TWTR.