Thursday, August 2, 2012

CLOSING the $AAPL credit put spread entry

3 aug - big SPY up day and Apple moving up to 617ish gave me a good opportunity to tak off this spread from yesterday. again, one of my guidelines is that if a credit spread gets 40-50% of its max profit potential within 1-3 days i take profits.. high probability that i can reenter again as stock moves up and down. 2 times in an opex cycle is common, three times is harder to come by..

Buy to close the Aug 565/570 credit put spread at .17 for about 66% of max profit in one day


2aug - SPY down 20 or so on draghi no action and AAPL dipped to near 600 again.. a rapid selloff down to the 50day would have been ideal.. but with the dividend hitting next week im assuming stock is range bound.. so will use the the 570 level this time..that was the max level that the bears could push the stock down to after earnings.. also will be under the 50day moving average

Sell to open the 565/570 Aug credit put spreads at .50

Trademonster analysize tab show this spread to have a 90% probability of max profit at opex at the time of entry with stock around 603. additionally since i have diagonal spreads as well.. my short 605's give me an added hedge if stock does drop (as in the short calls will expire at max profit..offsetting any losses on the credit put spread)

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