Wednesday, March 7, 2012

The Apr $AAPL trade - credit put spreads

8 mar - so much for the sell on the news hype, stock jumped up to 540+ giving me a near 50% gain in these spreads so i took profits at 55cents. like i said below, if i get 40-50% of the max gain in 2-3 days i take a profit. with 44 days left till april opex there is a high likelihood that stock will drop again and that i can reenter if not the same spread then a similar spread..i guess to make it worthwhile i just need to take in more than .55 credit on the next spread. i have had many trades like this where i was up 50% but held..stock pulls back, sometimes right to where i put trade on in first place and then i kick myself for not taking that easy 50%. if it doesnt pullback then i will just pat myself on the back for having another profitable with so much time left till opex it will not take much of a movement in the stock to get a good premium again..could be down $15 in 30min like a few days ago or some other meaningless cnbc hype...greek debt blather, job claims, etc

6mar - Sold the Apr2012 475/480 credit put spread for $1.05 x10 = $1050 credit
8mar - bought to close the spread for .55 x10                                 = $550
                                                                      profit for 2day hold  = $500

yesterday entered the following trade for Apple $AAPL:

6mar - Sold the Apr2012 475/480 credit put spread for $1.05 x10 = $1050 credit

Probability of max profit using Trademonster Analyse tab was 79%. 46 days till opex
Using the support line near 486 to shoot against, so short strike is below that level.
Plan is to hold until either time decay/stock appreciation reduces value of spread to where its an 80%+ gain , or take profits if i have a 40-50% gain within 2-3 days with thought of being able to reentry another spread prior to opex. will update this trade as i take action or adjust.