## Spring is in the air, home improvement shows run 24/7, and the wife wants something new in the house.

For all your DIY projects you'll likely make a trip to Home Depot (HD).  Grab your hard hat, lumber, light bulbs, tools, you name it.  Record number of people are working on their old or newly bought homes and Home Depot is able to grow, become more efficient and reward shareholders handsomely.

This is the perfect type of situation to trade for income by selling put options and earn big cash upfront payment. 

### Reminder, we sell put options to collect cash up front by agreeing to buy a stock at a fixed price between now and the options expiration date. 

To reduce risk it is important to only use this strategy on stocks we are happy to own and at an attractive price. 

### Home Depot is a leader in building materials and home-improvement products.

This great business is largely insulated from online shopping with many items difficult to impossible to efficient ship to the end customer.  Home Depot is reporting stellar numbers with sales topping $100 billion up 35% since 2013.  The business produces an attractive 8.7% profit margin and its earnings per share (EPS) is up big from $3.04 in 2013 to $7.39 last year.

Home Depot is able to generate more profits without having to build a lot of new stores with more customers visiting existing stores and spending more on average at each visit. Also known as same-store sales which is up 6.8% from last year.

It pays an attractive dividend of 2.2% but even better it is growing this dividend 24% per year.  If this rate continues investors with today's cost basis will be earning 6.5% a year in dividends by 2023. 

It has great valuations with an EV/EBITDA ratio of 14.1.  A world class business with this type of growth deserves this premium valuation.

### In the chart below you see the Home Depot stock price has maintained an uptrend above the 200 day moving average (an important long term technical metric). After a successful test the stock price is on the rise again.

![hd.png](https://gateway.ipfs.io/ipfs/QmWEPgppTbqNnuGMYhRBjueMbPHQb932LJaSizi4bQHmRy)

### The recent pullback presents a wonderful trading opportunity today.


To take advantage, **I suggest you sell the June 15, $180 puts on Home Depot for $3.60** (use a limit order). The instant 2% upfront payout has an annualized return of 16.6%

If Home Depot holds above $180 through June 15, put sellers will keep the $3.60 free and clear. 

If Home Depot closes below $180 on expiration day, put sellers will buy shares at a 4.5% discount to today's price (including the payout). 

For protection it is best to close the position with a "Buy to Close" order if the stock price falls below $162.  We have plenty of room for the stock to move around by placing the stop loss 12.3% below yesterday's closing price. 

**Put more money in your pocket by selling for income on a great and growing business.**

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Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.