Trade Alert: Add Protective Puts on TPR and SYF

Today, we’ll use the short-term bounce in the stock market as an opportunity to add protective puts on two beaten-down stocks: Tapestry (NYSE: TPR) andSynchrony Financial (NYSE: SYF).

You can skip today’s alert if you don’t own shares of these companies. I’ll be back next Wednesday with a new income opportunity for everyone.

Actions to Take: 
Tapestry and Synchrony Financial

The stock market rallied on Wednesday after the Federal Reserve signaled a pause in interest-rate hikes for 2019.

Tapestry and Synchrony Financial have been trending lower in recent weeks. This quick bounce is our opportunity to add protection that will limit the downside risk of our trades.

I still believe in these companies. Both will benefit from strong consumer spending as we approach 2019.

Back in October, consumer spending tied the biggest increase in spending all year, contributing to a 0.6% bump. Income for consumers jumped 0.5%. That’s the largest increase we’ve seen since January.

This rise comes just in time for the holiday shopping season. More consumers are set to buy Tapestry’s accessories. Synchrony Financial benefits from offering many in-store credit cards. As consumers spend more, they’ll take out more credit as well.

I don’t want to exit just yet. We’ll add protective put options to limit our downside risk over this volatile period.

Note: Buy one put option contract for every 100 shares of the stock you own. If you own 400 shares, you should buy four contracts. You can skip these alerts if you don’t own any shares.

Here’s your action to take for Tapestry:

Trade Recommendation

Stock/ETF:

Tapestry (NYSE: TPR)

Option Type:

Put Option

Expiration:

Feb-15-2019

Strike Price:

$35

Option Symbol:

TPR190215P00035000

Action:

Buy to Open

Order Type:

Limit Order

Duration:

GTC (Good ‘Til Canceled)

Limit Price:

$1.50 (Anything less than $1.50 is great.)

Price at Last Glance:

$1.45

Trade Deadline:

If your order is not filled in the next week, I’ll update you on the trade.

Here’s your action to take on Synchrony Financial:

Trade Recommendation

Stock/ETF:

Synchrony Financial (NYSE: SYF)

Option Type:

Put Option

Expiration:

Mar-15-2019

Strike Price:

$25

Option Symbol:

SYF190315P00025000

Action:

Buy to Open

Order Type:

Limit Order

Duration:

GTC (Good ‘Til Canceled)

Limit Price:

$1.50 (Anything less than $1.50 is great.)

Price at Last Glance:

$1.40

Trade Deadline:

If your order is not filled in the next week, I’ll update you on the trade.

That’s all for today.

I’ll be back on Wednesday with a new income opportunity to keep our profits rolling in.

If you have any questions or comments, you can reach my team and me at pureincome@banyanhill.com. I may feature your question in my upcoming video mailbag.

Regards,


Chad Shoop, CMT
Editor, Pure Income