Please Note: These recommended trades only apply to those Personal Finance Income Plus members who already have positions in the mentioned stocks and covered calls. Do NOT do these trades as initial positions.

1. Diagonal Spread Roll of Monsanto (NYSE: MON) to January

and

“Sell to Open” January $90 Call

Option Symbols: MON121020C87.5 and MON130119C90

Limit Order Price: Net credit of $1.60 or more ($160 per spread)

If your broker doesn’t allow option spreads, then you’ll have to do two separate single-option trades:

(a) “Buy to close” October $87.50 call for a debit of $2.35 or less ($235 per contract)


(b) “Sell to open” January $90 call for a credit of $3.95 or more ($395 per contract)

Directional View for Underlying Stock: Neutral to bullish

Personal Finance Portfolio: Growth

•    Tell your broker:

For a diagonal spread (preferred):

I’d like to enter an option spread order on Monsanto (MON) stock. Specifically, I want to buy to close the October $87.50 call and sell to open the January $90 call for a net credit of $1.60 per share or more.

• For a two-part trade:

I’d like to buy to close the October $87.50 call on Monsanto (MON) stock for a debit of $2.35 per share or less.

I’d like to sell to open the January $90 call on Monsanto (MON) stock for a credit of $3.95 per share or more.

Please note: The important thing is to achieve a net credit on the roll (i.e., both trades) of $1.60 or more. The specific limit prices of the individual “buy to close” and “sell to open” trades are just starting points and should be adjusted as needed, keeping the net credit of the overall roll in mind.

2. Diagonal Spread Roll of Discover Financial Services (NYSE: DFS) to January

and

“Sell to Open” January $40 Call

Option Symbols: DFS121020C36 and DFS130119C40

Limit Order Price: Net debit of $2.40 or less ($240 per spread)

If your broker doesn’t allow option spreads, then you’ll have to do two separate single-option trades:

(a) “Buy to close” October $36 call for a debit of $4.60 or less ($460 per contract)


(b) “Sell to open” January $40 call for a credit of $2.20 or more ($220 per contract)

Directional View for Underlying Stock: Neutral to bullish

Personal Finance Portfolio: Growth

•    Tell your broker:

For a diagonal spread (preferred):

I’d like to enter an option spread order on Discover Financial Services (DFS) stock. Specifically, I want to buy to close the October $36 call and sell to open the January $40 call for a net debit of $2.40 per share or less.

• For a two-part trade:

I’d like to buy to close the October $36 call on Discover Financial Services (DFS) stock for a debit of $4.60 per share or less.

I’d like to sell to open the January $40 call on Discover Financial Services (DFS) stock for a credit of $2.20 per share or more.

Please note: The important thing is to achieve a net debit on the roll (i.e., both trades) of $2.40 or less. The specific limit prices of the individual “buy to close” and “sell to open” trades are just starting points and should be adjusted as needed, keeping the net debit of the overall roll in mind.

3. Horizontal Spread Roll of Diageo (NYSE: DEO) to January

and

“Sell to Open” January $110 Call

Option Symbols: DEO121020C110 and DEO130119C110

Limit Order Price: Net credit of $2.80 or more ($280 per spread)

If your broker doesn’t allow option spreads, then you’ll have to do two separate single-option trades:

(a) “Buy to close” October $110 call for a debit of $3.50 or less ($350 per contract)


(b) “Sell to open” January $110 call for a credit of $6.30 or more ($630 per contract)

Directional View for Underlying Stock: Neutral to bullish

Personal Finance Portfolio: Growth

•    Tell your broker:

For a horizontal spread (preferred):

I’d like to enter an option spread order on Diageo (DEO) stock. Specifically, I want to buy to close the October $110 call and sell to open the January $110 call for a net credit of $2.80 per share or more.

• For a two-part trade:

I’d like to buy to close the October $110 call on Diageo (DEO) stock for a debit of $3.50 per share or less.

I’d like to sell to open the January $110 call on Diageo (DEO) stock for a credit of $6.30 per share or more.

Please note: The important thing is to achieve a net credit on the roll (i.e., both trades) of $2.80 or more. The specific limit prices of the individual “buy to close” and “sell to open” trades are just starting points and should be adjusted as needed, keeping the net credit of the overall roll in mind.

4. Diagonal Spread Roll of Celgene (NYSE: CELG) to January

and

“Sell to Open” January $77.50 Call

Option Symbols: DFS121020C70 and CELG130119C77.5

Limit Order Price: Net debit of $3.45 or less ($345 per spread)

If your broker doesn’t allow option spreads, then you’ll have to do two separate single-option trades:

(a) “Buy to close” October $70 call for a debit of $8.20 or less ($820 per contract)


(b) “Sell to open” January $77.50 call for a credit of $4.75 or more ($475 per contract)

Directional View for Underlying Stock: Neutral to bullish

Personal Finance Portfolio: Growth

•    Tell your broker:

For a diagonal spread (preferred):

I’d like to enter an option spread order on Celgene (CELG) stock. Specifically, I want to buy to close the October $70 call and sell to open the January $77.50 call for a net debit of $3.45 per share or less.

• For a two-part trade:

I’d like to buy to close the October $70 call on Celgene (CELG) stock for a debit of $8.20 per share or less.

I’d like to sell to open the January $77.50 call on Celgene (CELG) stock for a credit of $4.75 per share or more.

Please note: The important thing is to achieve a net debit on the roll (i.e., both trades) of $3.45 or less. The specific limit prices of the individual “buy to close” and “sell to open” trades are just starting points and should be adjusted as needed, keeping the net debit of the overall roll in mind.

5. Horizontal Spread Roll of Verizon (NYSE: VZ) to January

and

“Sell to Open” January $45 Call

Option Symbols: VZ121020C45 and VZ130119C45

Limit Order Price: Net credit of $0.85 or more ($85 per spread)

If your broker doesn’t allow option spreads, then you’ll have to do two separate single-option trades:

(a) “Buy to close” October $45 call for a debit of $1.05 or less ($105 per contract)


(b) “Sell to open” January $45 call for a credit of $1.90 or more ($190 per contract)

Directional View for Underlying Stock: Neutral to bullish

Personal Finance Portfolio: Income

•    Tell your broker:

For a horizontal spread (preferred):

I’d like to enter an option spread order on Verizon (VZ) stock. Specifically, I want to buy to close the October $45 call and sell to open the January $45 call for a net credit of $0.85 per share or more.

• For a two-part trade:

I’d like to buy to close the October $45 call on Verizon (VZ) stock for a debit of $1.05 per share or less.

I’d like to sell to open the January $45 call on Verizon (VZ) stock for a credit of $1.90 per share or more.

Please note: The important thing is to achieve a net credit on the roll (i.e., both trades) of $0.85 or more. The specific limit prices of the individual “buy to close” and “sell to open” trades are just starting points and should be adjusted as needed, keeping the net credit of the overall roll in mind.

6. Horizontal Spread Roll of Dominion Resources (NYSE: D) to January

and

“Sell to Open” January $55 Call

Option Symbols: D121020C55 and D130119C55

Limit Order Price: Net credit of $0.40 or more ($40 per spread)

If your broker doesn’t allow option spreads, then you’ll have to do two separate single-option trades:

(a) “Buy to close” October $55 call for a debit of $0.05 or less ($5 per contract)


(b) “Sell to open” January $55 call for a credit of $0.45 or more ($45 per contract)

Directional View for Underlying Stock: Neutral to bullish

Personal Finance Portfolio: Income

•    Tell your broker:

For a horizontal spread (preferred):

I’d like to enter an option spread order on Dominion (D) stock. Specifically, I want to buy to close the October $55 call and sell to open the January $55 call for a net credit of $0.40 per share or more.

• For a two-part trade:

I’d like to buy to close the October $55 call on Dominion (D) stock for a debit of $0.05 per share or less.

I’d like to sell to open the January $55 call on Dominion (D) stock for a credit of $0.45 per share or more.

Please note: The important thing is to achieve a net credit on the roll (i.e., both trades) of $0.40 or more. The specific limit prices of the individual “buy to close” and “sell to open” trades are just starting points and should be adjusted as needed, keeping the net credit of the overall roll in mind. If you can’t get $0.40, just let the October $55 call expire worthless and try again next week.

Price Adjustment Regarding These Roll Trades

Unlike the opening of an initial trade, all of these trades (except Dominion) involve closing in-the-money call options before they get automatically exercised against us. Consequently, we do not have the luxury of patience and possibly passing on the trade (unless you are willing to sell your stock). We will need to be flexible with our limit prices and adjust them if necessary as we get nearer to the market’s close on Friday, Oct. 19.

The limit prices I suggest above are starting points. If either don’t fill within a few hours, I recommend adjusting the limit prices by a few cents per share (up for debits and down for credits) and waiting a few hours. If this adjusted limit price doesn’t fill, adjust again by a few more cents. Repeat the process until you get filled.

For the Dominion trade, there is less risk of having the underlying stock called away because the stock price is currently below the $55 call strike price. As such, you can be more stubborn about your limit prices for the roll credit. If the limit credit price doesn’t fill, you can wait until next week to sell a January covered call (unless the underlying stock moves above $55 during Friday’s trading, in which case you’ll need to buy back the October $55 call prior to Friday’s market close).