The past three weeks have brought a healthy measure of fear back to the stock market, as evidenced by the VIX jumping to its highest value since January’s correction. For that reason, I am issuing three new trades this week to take advantage of the opportunity to earn more income due to heightened put premiums.

We’ve made money on all three of these names earlier this year. The first two trades are essentially repeats of recommendations I made two months ago that never caught a bid as the stock market was soaring towards record highs.

Please note that the strike prices for the first two trades are a bit on the high side ($60 and $65), so your broker will require you maintain more capital to back them up. The third trade, however, has a strike of only $20, so you can control three times the amount of stock for the same amount of capital at risk.

Trade 1: Sell a Put on Abbot Laboratories (ABT)

We tried selling a $60 put on ABT in August but its share price ran up before we could get an execution. Now that the stock market has cooled off a bit, we’ll try this trade again but this time at the $65 strike price.

How to Make the Trade:

• Trade: Sell to open the January 18, 2019, $65 put option on Abbot Laboratories (NYSE: ABT).
• Symbol: ABT190118P00065000
• Prices:
  • Limit Order Price: a credit of $1.50 or more.
  • Tell your broker: “I want to sell a put on Abbot Laboratories stock. Specifically, I want to ‘sell to open’ one January $65 Put for a credit of $1.50 per share or more.”

Allocation: Sell one put for every 100 shares of Abbot Laboratories you would be pleased to buy at $65 per share. Investors should set aside $6,500 per contract sold to buy the stock in case the option expires in the money.

Trade 2: Sell a Put on Prologis (PLD)

Similar to Abbot Labs, Proligis also got away from us before we could execute a $60 short put order in August so we’ll try this one again.

How to Make the Trade:

• Trade: Sell to open the February 15, 2019, $60 put option on Proligis (NYSE: PLD).
• Symbol: PLD190215P00060000
• Prices:
  • Limit Order Price: a credit of $1.50 or more.
  • Tell your broker: “I want to sell a put on Proligis stock. Specifically, I want to ‘sell to open’ one February $60 Put for a credit of $1.50 per share or more.”

Allocation: Sell one put for every 100 shares of Proligis you would be pleased to buy at $60 per share. Investors should set aside $6,000 per contract sold to buy the stock in case the option expires in the money.

Trade 3: Sell a Put on Huntsman (HUN)

Our timing was nearly perfect on this trade earlier this year when we sold a $30 put that expired out-of-the-money in July. Since then, its share price has fallen into the low-20s, proving an opportunity to collect more premium at a lower strike price.

How to Make the Trade:

• Trade: Sell to open the February 15, 2019, $20 put option on Huntsman Corp. (NYSE: HUN).
• Symbol: HUN190215P00020000
• Prices:
  • Limit Order Price: a credit of $1.25 or more.
  • Tell your broker: “I want to sell a put on Huntsman stock. Specifically, I want to ‘sell to open’ one February $20 Put for a credit of $1.25 per share or more.”

Allocation: Sell one put for every 100 shares of Huntsman you would be pleased to buy at $20 per share. Investors should set aside $2,000 per contract sold to buy the stock in case the option expires in the money.

Further Instructions Regarding all Three of these Trades:

• • If the option price changes, you can adjust our recommended limit based on the midpoint of the bid/ask spread, which you should be able to see when entering the trade. Just make sure the potential credit is at least equal to the Limit Order Price specified above.
  • Place your limit order on a “good ’til canceled” (GTC) basis and be patient.