This trade was not generated by Dr. Leeb’s indicators, which are very short-term in nature and work best with index options. From its inception, Systematic Wealth was meant to be an equity trading service with holdings periods measured in weeks or months, but not days. This trade is consistent with our approach of using proprietary algorithms to identify stocks that we believe have become oversold and likely to outperform the market over the next 1 – 6 months, and we will be issuing more equity options alerts in the future as our indicators dictate. Thank you.

Hi Benny. I do not have a predetermined target price that I will execute on the options trades. My inclination is to hold them until expiration unless I feel we have gotten most of the gain we can hope to get. That said, in a market as volatile as this one there is no telling what may happen so I am watching all of the open positions closely with an eye towards locking in gains when they are there for the taking! 🙂

Hi Jerry. Since this is a long call recommendation, you could simply buy the underlying stock if you prefer to own equity. Of course, the ROI will be less than with the option but there is less risk as well. In this case, if GIS goes from $45 to $55 then the return would be roughly 22%.

Yes, I do. I expect General Mills to react like Kellog did last week after it released its quarterly results (https://finance.yahoo.com/news/kellogg-company-reports-2018-first-120000706.html) when it reports its next set of quarterly results in June. Insiders have bought a lot of GIS stock over the past several months, suggesting they believe the performance figures will be better than expected later this year. However, if you want to play it safer you could go out further in expiration if you don’t mind paying a little bit more in premium for the same strike price.

I bailed at $2.17 this morning for what was essentially breakeven after fees. Given where we were not too long ago, I am very pleased to break even.

In terms of how I am managing the SW portfolio, I am going to wait until expiration unless GIS jumps up early next week. Of course, you are free to do whatever like so closing it out early and getting what you can for it is entirely up to you.

As a rule, we don’t roll option trades in Systematic Wealth. That said, I still believe the stock is undervalued and likely to rebound over the second half of this year so a roll would be a good move.