Chewy (CHWY) delivered excellent quarterly results this week, beating on both the top and bottom line.
Revenue for its fiscal third quarter surged 45% year over year to $1.78 billion, while the per-share loss of $0.08 was narrower than expected. The company said it had 17.8 million active customers, up nearly 40% from a year ago, and net sales per active customer rose 2.8% to $363. Management also raised their sales guidance for the full year, ending in January.
The stock initially sold off following the announcement, spiked and then sold off again before finishing the week strong. This kind of volatility is why we love to trade Chewy — and why we tend to sit earnings reports out.
Let’s get back in the game by selling a put today.
Current Stock Price: $84.37
Action: Sell to open the CHWY Dec Monthly (12/18) 80 Put
Current Option Price: $1.32-$1.34
Recommended Limit: Set your initial limit order $1.33
And here’s where we stand with our other Perpetual Income Portfolio Club positions heading into the weekend.
AAPL Dec Week Two (12/11) 122 Put
Apple (AAPL) managed to hold above $120 despite a midweek sell-off in tech names.
This is the newest member to our Perpetual Income Portfolio Club roster, which I introduced in Monday’s Live Trading Session. I’m looking forward to capturing rich premiums from this stock each week.
We are on track to be assigned shares and will sell a call against them next week. If the stock happens to close above $120, our put will expire worthless and we will sell another one next week.
Current Stock Price: $121.66
Action: Watch put expire
AMAT Dec Week Two (12/11) 87.50 Put
Applied Materials (AMAT) is down around 1.4% for the week thanks to the sell-off in the tech sector but shares are still up more than 25% in the past month.
AMAT is trading right at our put’s strike. If it closes below our strike we are assigned shares, we will sell a call against them next week. If the stock closes above $87.50, our put will expire worthless and we will sell another one next week.
Current Stock Price: $87.56
Action: Watch put expire
TGT Dec Week Two (12/11) 172.50 Put
Target (TGT) attempted and failed to retake the $175 level this week. But I believe support in the $167.50-$170 range will hold and that the stock will break out in coming weeks.
The country is in store for more lockdowns as coronavirus cases surge, and Target has and will continue to be a big beneficiary of the pandemic. The retailer’s strong execution on digital sales, curbside pickup and home delivery helped it win $6 billion in market share so far this year.
We are on track to be assigned shares and will sell a call against them next week. If the stock happens to close above $172.50, our put will expire worthless and we will sell another one next week.
Current Stock Price: $171.49
Action: Watch put expire
Disclosure: I have positions or trade in and out of AAPL, AMAT, CHWY and TGT.