Monday, September 17, 2012

update to the $AAPL diagonal entry

26 sep - will aaple now near 665 and the oct 715 short call worth about 3.40 you have a sit tight for the rest of Oct opex and collect that 3.40 or see if you can come up with another strategy for the remainder of the 24 days till opex that will make you more money than that $340. so having captured about 70% of that short call premium i bought back the short call at 3.40 and entered into a weekly 670/680 call ratio spread for 1.05..max profit is a 680 pin on friday.. on friday based on where the stock is i will look to enter another weekly ratio spread for next week.. the strategy is to get that upside exposure for a rebound and do it cheaply. i will be successfull if this weeks ratio, next weeks ratio , and the following weeks possible ratio profit in excess of that $340 i could have made by doing nothing. remember the daily / weekly move of the stock is irrelevant for the Leap since i will hold that regardless..have few more months in 2012..all of 2013..all of 2014 to do short calls and ratios...besides, gene munster said its going up


17 sep - entered a new diagonal spread on apple today. was expecting the 2015 options to come on the board next monday and just stumbled onto them today. stock broke to a new high friday and followed thru today. there are two camps out there, the camp that swears to not buy a stock when it hits a new high because its too strong and wait for a pullback. and then theres the Buy on a new high, buy high sell higher, only way it goes up is to keep making new highs camp.. thats the camp im in. so i bought the 2015 630 call and sold the Oct 715 short call against it. total debit was $153.50.. not going to mess around with weeklies this first month, this far out i wanted to get at least $1200 in credit from the short call. earnings are usually the tuesday after opex so ideally this one expires at max profit and then sell another short call weekly that will be juiced up for earnings. will see how it looks then. remember my strategy on diagonals, the day to day, week to week movement of the stock is irrelevant and the 2015 Leap will be held regardless of what happens. trying to capture the premium of the short calls. the stock taking off from here till Oct opex is ok and not a bad problem to have, if you put these options into a profit calculator, like the analysis tab on Trademonster, even a move to 770 is still profitable. perfect scenario would off course be a pin at 715 at Oct opex. note...the quickest way to screw up a diagonal is to buy that Leap too close to At the money to try to get cute and pay less.

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