Expiration Friday

We have a number of positions that need adjustment today.

No Apple. We are out for now.

WalMart – WMT continues to be sold heavily, but the chart tells a different story. Walmart is in a strong bull market so we let the chart, NOT the market, tell us what to do. Today we buy. (Subscribers get trade details as the orders are entered). We also need to roll our short puts that expire today. We are rolling the 84 puts, the 85 puts, and maybe the 86 puts. Both the 84 and 85 are close enough to the current price of $83.82 that we can roll for enough money to meet our criteria. The 86 strike – maybe not. We may let those shares be put to us and sell calls against them. For now, we do have rolling orders in place for all 3 positions and we will continually drop the asking price as the day goes on. When rolling weekly options on expiration day, you want to start with a high price and cut it every few minutes through the morning. By afternoon, pricing has deteriorated and you will not be able to get the same income for the roll. There are ebbs and flows to the market throughout the day.

Example: Right now we have the short 84 puts priced to roll at our asking price of 75 cents. The bid is now 53 cents. We are going to go ahead and cut the 75 to 72 cents for a time, then cut it some more. As we do that, we watch the bid to see if it moves at all. Weekly options are often thinly traded so bid/ask spreads can be extra wide. It takes some time to find out what the price level really is and you have to go fishing with your orders.

Stay optioned, my friend!

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