For Tue Aug 8 2017 I had hoped to add to my American Express Company Stock naked put positions at the $83 put strike for Aug 25 and Sept 1. Unfortunately the stock remains in an uptrend and the put premiums remain lower than I would like. I will keep the stock on the radar for the rest of this week.
On Tuesday, the Tomorrow’s Trade was in Aflac Stock (AFL). I sold 10 of the Sep 15 expiry $77.50 put strike for 35 cents. The company only has monthly options available.
Tomorrow’s Trade for Wednesday Aug 9 2017 – Costco Stock (COST)
The drop in Costco stock from $180 valuations down to $150 valuations seems to be possibly over. The stock closed back at 157.75 on Tuesday. The chart below is intraday on Tuesday. You can see that $150 has a lot of support and so far, the stock has bounced off this major support level.
Technically momentum is positive and moving sideways. MACD has a buy signal or up signal in place. The Ultimate Oscillator is positive but falling and the Fast Stochastic has a down signal in place.
Costco Stock to Aug 7
Put Options Selling Tool Analysis
The Put Options Selling Tool Analysis for Costco stock shows the stock’s recent uptrend is probably ready to continue. While selling puts is not recommended until the uptrend can be confirmed there are two put strikes shown for selling. These are $151 and $150.
Costco stock analysis
Naked Puts
I am planning on selling 5 of the $152.50 put strike for Aug 25 expiry which closed at 78 cents on Tuesday. I also plan to sell the $150 put strike for Aug 25 expiry if I can earn 45 cents or more.
Credit Put Spread
For a credit put spread I would sell either or both of the put strikes outlined above in naked puts. I would then buy an equal number of the long put strike at $140 for Aug 25 expiry and aim for 5 cents.
Covered Calls
For Covered Calls I would sell the $155 call strike for Aug 25 expiry and I would aim for at least 90 cents call premium over the price paid for the shares when bought.
Naked Calls / Credit Call Spreads
The stock looks set to resume its uptrend. I would not sell naked calls. However if an investor were willing to own shares and turn naked calls into covered calls, I like the $162.50 call strike for Aug 25 expiry which was 65 cents at the close on Tuesday. Personally I have no interest in selling puts at this time.
Stock Trade
At this time I would not own shares. I would want the stock to dip back to at least $152 before picking any stock up for a stock trade.
Thank you for not posting these trades to my Public Yahoo Forum. Any questions can be emailed directly to me at members@fullyinformed.com or you can create a new topic in the private members forum. Tomorrow’s Trade is not a recommendation or financial advice. It is an outline of a potential trade to show what is possible for investors to achieve through studying stocks and their actions. It is designed for those investors who want to learn how to set up trades and protect them once established.
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