The Signal

The Safe Option Strategy

Costco Wholesale Corp. (COST) Bull Put Spread

The Safe Option Strategy

STO Dec16 $150.00 Strike Puts - $2.40 Credit BTO Dec16 $148.00 Strike Puts - $1.81 Debit Total Credit $0.59 Per Share Max Risk is $1.41 Per share Limit Credit Order of $0.55 per share to open the trade Target ROR is 25% Max ROR is 42% Target time in trade is <18 days

Trade Explanation of the Bull Put Spread

Click on the link above to see the definition of the spread trade.

The Signal

The best weekly

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serious options trader.

November 28, 2016

By Safe Option Strategies www.safeoptionstrategies.com

Safe Option Strategies LLC. does not advise any buying or selling of any securities nor any derivatives thereof. The information contained in this newsletter is for educational purposes only. Trading securities and options can generate substantial profits and losses. No advice is ever given to buy or sell and any trading with real money is done at the subscribers own potential risk.2

The Signal Company Technical’s

Summary

Costco is moving into the best part of their year. Tis the season! Even though the stock price has flattened a little bit, it should be able to hold for another couple of weeks, and allow this trade to get profitable.

Safe Option Strategies LLC. does not advise any buying or selling of any securities nor any derivatives thereof. The information contained in this newsletter is for educational purposes only. Trading securities and options can generate substantial profits and losses. No advice is ever given to buy or sell and any trading with real money is done at the subscribers own potential risk.3

The Signal The Primary Exit Plan

The primary exit for this trade is to let both options expire worthless at options expiration. If this

happens, we book our max profit on the trade ($0.59 per share in this case). If the stock price

moves up strong in the next week or two and we can get out ahead of expiration with half or more of

our target profit, we will do so.

Adjustment for Bearish Trend

If the stock price were to move bearish, there are several ways to adjust the trade: 1) We could

allow stock to be put to us for $150.00 per share (our short put strike price). We would also roll our

long puts out in expiration, and possibly to a strike price one or two strikes lower. Then we would

add short calls (strike and month to be determined based on where the stock price is trading when

this actually happens) and we would be in a perfect collar trade. 2) We could try to exit the trade by

buying to close our short puts at our theoretical breakeven point. This is the strike price of the short

puts minus the total net credit in the trade ($149.41 in this case). If we do this, we would then sell

the long puts for whatever value they still have and possibly book some profit in the process. 3) The

last choice would be to roll the whole trade out in time and down in strike prices, but this is a tricky

adjustment, and one we would not likely do on this trade.

Safe Option Strategies LLC. does not advise any buying or selling of any securities nor any derivatives thereof. The information contained in this newsletter is for educational purposes only. Trading securities and options can generate substantial profits and losses. No advice is ever given to buy or sell and any trading with real money is done at the subscribers own potential risk.4

The Signal

Trade Updates

No New Trade (11/21) DIS ITM Bull Call (11/14) – As of today’s close, we have about 14% profit in this trade. It is moving our way, so there is no need to close it right now. QQQ Strangle (11/07) – WE are in better shape right now than we were last week, but still not out of the woods. Our call side of the trade has profit in it, so we are going to close it tomorrow. At the open, we will sell to close our Dec16 $117 calls for $2.40 per share (approx.).

XOM ITM Bear Put (10/31) – We rolled the whole trade out on Friday, and now have an ITM Bear Put with the $89/87 strikes and DecWk5 expiration. Today’s move down in the share price helped. No changes right now. RHT Bear Put Calendar (07/18) – We still have an adjusted Cost Basis of $2.30. We still have some work to do on this trade. At the open tomorrow, we will add a new set of short puts. We will get the DecWk1 $77.50 strikes for a credit of about $0.70.

Safe Option Strategies LLC. does not advise any buying or selling of any securities nor any derivatives thereof. The information contained in this newsletter is for educational purposes only. Trading securities and options can generate substantial profits and losses. No advice is ever given to buy or sell and any trading with real money is done at the subscribers own potential risk.5

The Signal

Safe Option Strategies LLC. does not advise any buying or selling of any securities nor any derivatives thereof. The information contained in this newsletter is for educational purposes only. Trading securities and options can generate substantial profits and losses. No advice is ever given to buy or sell and any trading with real money is done at the subscribers own potential risk.6

The Signal

The Watch List

Symbol Earnings SWHC 12/01 ADBE 12/20 RHT 12/21 NKE 12/28 COST 12/29 MON 01/06 BAC 01/18 NFLX 01/18 EBAY 01/20 WBA 01/20 UA 01/21 CAT 01/22 AAPL 01/25 VLO 01/26 BA 01/27 FB 01/27 GRMN 01/27 BIDU 01/27 P 01/27 F 01/28 V 01/28 CVX 01/29 XOM 01/29 AMZN 01/29 FSLR 02/02 SBUX 02/03 DIS 02/10 HD 02/16 DE 02/19 BBY 02/23

Safe Option Strategies LLC. does not advise any buying or selling of any securities nor any derivatives thereof. The information contained in this newsletter is for educational purposes only. Trading securities and options can generate substantial profits and losses. No advice is ever given to buy or sell and any trading with real money is done at the subscribers own potential risk.7

The Signal The Bull Put Spread

A credit spread, the bull put uses a credit on a short, out of the money option as the primary option, with a long put option one or two strikes lower as the hedging option. The short put is typically placed at or below a strong level of support, and as the name of the trade suggests, when the stock is in a bullish pattern. The ideal scenario is for both options to expire worthless which allows us to book our maximum profit.