We have three new positions this week, which I introduced in today’s Perpetual Income Portfolio Club Live Trading Session. You can watch a recording of the session here.
Today, I am recommending we sell puts on Applied Materials (AMAT) and Carnival (CCL), as well as a new addition to our portfolio — Exact Sciences (EXAS). I will be releasing a video and write-up dedicated solely to Exact Sciences, but I covered it in today’s session as well.
Exact Sciences is a solid company with a speculative stock, which means great premiums for our Perpetual Income Engine strategy.
Our inaugural trade in EXAS in this service is a “silly put” (a put that is at least 10% out of the money with an annualized return of 15% or more) expiring on March 15. There is no need to rush to make the trade. If you are not familiar with the stock, I recommend watching the recording of today’s session before making it. You may even want to wait until I send you the full profile on the company and stock, which I expect to have ready later today.
Finally, when you go to make the trade, note that the bid-ask spreads are wide, as there is some leftover earnings-related volatility from last week’s announcement. So, you may need to work your limit orders.
As for Cheniere Energy (LNG), we already have a call that expires this week, so no action is needed at this time. The company is expected to release earnings tomorrow, and we are going to hold tight through the announcement. Depending on the market’s reaction, we may roll the position midweek, so keep an eye out for an alert.
Applied Materials (AMAT)
Current Stock Price: $39.31
Action: Sell to open the AMAT Mar Week One (3/1) 39.50 Put
Current Option Price: $0.35-$0.36
Recommended Limit: Set your initial limit order at $0.35
Current Stock Price: $58.65
Action: Sell to open the CCL Mar Week One (3/1) 58.50 Put
Current Option Price: $0.40-$0.45
Recommended Limit: Set your initial limit order at $0.40
Exact Sciences (EXAS)
Current Stock Price: $91.03
Action: Sell to open the EXAS Mar Monthly (3/15) 82 Put
Current Option Price: $0.70-$0.95
Recommended Limit: Set your initial limit order at $0.80
Cheniere Energy (LNG) Mar Week One (3/1) 66 Call
Current Stock Price: $64.85
Action: No action is needed at this time
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, CCL, EXAS and LNG.