Below are this week’s Perpetual Income Portfolio Club trades.
We are selling a call on Gilead (GILD). We have an open position in Applied Materials (AMAT) and will sell a put after their earnings come out on Thursday.
IMPORTANT: If you are new to this service or any call position, 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.
Gilead Sciences (GILD)
Current Stock Price: $68.48
Action: Sell to open the GILD August Week Two (8/14) 69 call.
Current Option Price: $.54-$.59
Recommended Limit: Set initial limit order at $.56
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 on Monday 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, GILD, CHWY and TGT.