Wednesday, August 15, 2012

CLOSING $AAPL credit put spread entry and strategy

20 aug - stock up 30points since entry and this credit put spread has gained over 50% of its max profit in a few trading days so im taking profits..still have 4+ weeks left for SEP opex so will look to reenter new credit put spreads on a pullback, plenty of time
Buy to close 595/600 SEP credit put spreads at .40 for 62% gain


15aug- ive posted this strategy several times but will do so again in abbreviated format.. i currently have jan2014 DITM calls and Sep 600 and 610 short calls (diagonal spreads) . the 2014 calls get ignored since i will hold those long term.. so the 600/610 short calls will be used as a hedge to any credit put spreads. as of this second , the 600short call is worth about $3500each, 610 going for $2800 each.. so worst case if stock closes below 600 on opex day i keep that premium and use it to offset any losses on a credit put spread.
    seeing that i have 600short calls, that is the highest level i want to take a credit put spread, as in the 595/600 level.. 600level is the psychological support level, also the low for august level, and the 50day moving average will be above 600 in a few days for added support. the Trademonster analyse tab shows the 595/600 credit put spread to have a 77% probability of max profit at time of entry. you can pick strikes a little lower but since ive got that hedge from the short calls im going for a little more premium since it still meets my 75%+ probability cutoff for credit spreads

Sell to open Sep595/600 credit put spreads at $1.05

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