Tuesday, January 09, 2007

Sweet Apples!


Over the past 3 weeks, I've had some incredible options trades with Apple Computer, or now named, Apple Inc. I started on December 27th, 2006, and here are some of the trades I made.

12/27/2006 - Apple JAN '07 $80 Call - Bought $3.80 - Sold $4.90 = 26% Gain
12/27/2006 - Apple FEB '07 $80 Call - Bought $5.40 - Sold $9.00 = 66% Gain
1/3/2007 - Apple JAN '07 $100 Call - Bought $0.41 - Sold $0.70 = 70% Gain

As of right now I'm still holding some of the Jan '07 $100 Calls at an average price of $0.41 cents per contract. Today they were up over 100%. I'm trying to devise a strategy to hold them into earnings. I'm looking for some advise on which strategy to employ to reduce risk. Any ideas options traders? Thanks

Today the buyers surely came out in Apple after the release of their new iPhone, iTV (Apple TV), Widescreen iPod, etc. I did what I've heard as being called, "feeding the ducks". These buyers were so strong they kept bidding up these options to 200% at one point, so I kept selling some of my position right at the top to feed these guys, and sure enough, they picked up my orders with a 116% gain. Take a look...

3 comments:

Anonymous said...

Why hold until earnings.....Sell the news...
How is Futures trading going?

Big Bill

Bubs said...

Great trade on the apple options. I was able to scalp some shares today for a quick gain.

Bubs

Phil said...

The second Apple doesn't gain 15% on their earnings announcement the Jan $100s become worthless.

The largest 1 week move in Apple in 5 years is $10 other than this past week, which ended at $10 anway.

Sell those for sure, the real trick with Apple is to buy the high Febs (assuming good earnings) as the air comes out of them the next day and people start panic selling the options because they don't think they'll get hit.