AAPL Intraday Updates

  • Posted: 18 December 2011 05:49 PM

    Last week AAPL took a detour to the south. Will the share price rebound in pre-Christmas trading this week?

    [ Edited: 23 December 2011 06:29 PM by DawnTreader ]      
  • Posted: 18 December 2011 06:12 PM #1

    DawnTreader - 18 December 2011 09:49 PM

    Last week AAPL took a detour to the south. Will the share price rebound in pre-Christmas trading this week?

    DT, you closed a thread while I was authoring a post to it.  This is that post.

    Mercel - 18 December 2011 07:14 PM

    Travis has his own version of TA (and Max. Pain is a form of TA) and says AAPL is going “much higher.”  Who knows in this dysfunctional market—it blows my mind Apple could trade at $380 (or lower). 

    Watch the just posted “Jan 21 AAPL Pain” video.  http://aaplpain.com/

    Last week I zeroed out all previous January OI, in order to view current sentiment.

    What I see is virtually equal demand for the JAN 400 and 405 Calls since then (10,620 and 10,836 respectively).  With a price of $5.40 at the close Friday, buyers of JAN $405 are expecting an AAPL valuation greater than $415 (100% ROI).

    On the other side of the coin, Put OI skyrocketed at the $380/$385 Strikes, easily exceeding Call OI at $400/$405.  Their pricing and volume suggests a much greater sentiment to the down side.

    Implied Max Pain is ~$395.

    OI in the $340 to $440 range is:

    Calls: 38,356
    Puts: 56,732

    Note that the OI I display is after zeroing out all previous OI one week ago.  IOW, this is the OI originated in the last 7 days.

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    Posted: 18 December 2011 06:42 PM #2

    Dec. 18 (Bloomberg)—European finance ministers will seek to meet a self-imposed deadline for drawing additional aid to the debt crisis and cobble together new budget rules as investor confidence that a comprehensive solution is achievable wanes.

    Euro-area finance ministers will hold a conference call at 3:30 p.m. Brussels time tomorrow to discuss 200 billion euros ($261 billion) in additional funding through the International Monetary Fund and the mechanics of a so-called fiscal compact that was negotiated at a Dec. 9 European Union summit, according to two people familiar with the planning.

    ?They?ll try to get as much done as they can before Christmas, but it?s doubtful they?ll put markets in a Christmas mood,? Carsten Brzeski, an economist at ING Group in Brussels, said in an interview. ?There is still so much uncertainty.?

    The accord to ratchet up budget rules failed to ease concern that the monetary union risks buckling under the weight of the two-year-old crisis. Fitch Ratings lowered France?s credit outlook and put other euro-area nations on review Dec. 16, saying an overall crisis solution may be ?technically and politically beyond reach.? Belgium?s rating was cut two levels to Aa3 by Moody?s Investors Service on the same day.

    Euro-area officials aim to meet their deadline for tomorrow to arrange the IMF loans. The package entails about 150 billion euros pledged by euro-area central banks and another 50 billion euros to be contributed by non-euro EU states. The euro-area ministers will be joined in the call by their EU counterparts to thrash out measures including the decision-making process of the bloc?s permanent bailout fund, the European Stability Mechanism, one of the people said.

    ?Adverse Effect?

    ?The systematic nature of the euro-zone crisis is having a profoundly adverse effect on economic and financial stability across the region,? Fitch said in a note. The growing uncertainty is overshadowing countries? reform efforts, it said.

    The euro lost 2.5 percent against the U.S. dollar last week after the Brussels summit. The U.K.?s refusal to sign on to an EU-wide treaty change locking in new debt rules exposed divisions within the bloc and forced euro-region leaders to come up with a legal framework to patch together budget rules.

    Luxembourg?s Jean-Claude Juncker said two days ago that EU leaders would meet the deadline on channeling funding through the IMF, while Germany?s Bundesbank said it saw ?no urgent need? to reach a decision.

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    AAPL: to boldly go where no stock has gone before

         
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    Posted: 18 December 2011 06:42 PM #3

    Mercel, Gregg,

    My interpretation of what Travis said is AAPL would tend towards $400 by Jan OE.

    Candlestick pattern is bullish harami.

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  • Posted: 18 December 2011 06:45 PM #4

    Travis makes a distinction between very old and most recent purchases of calls/puts. I don’t understand the mechanics of that, but he’s been doing this for many years.
    On another note, enjoy AAPL’s latest “Santa” commercial. Really well done…
    http://www.macrumors.com/2011/12/18/apple-releases-new-santa-themed-ad-for-iphone-4s-and-siri/

         
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    Posted: 18 December 2011 06:48 PM #5

    mountainpeaks - 18 December 2011 10:45 PM

    Travis makes a distinction between very old and most recent purchases of calls/puts. I don’t understand the mechanics of that, but he’s been doing this for many years.

    Experienced options traders knew it for years too.  So do management accountants.  Sunk costs are irrelevant to future investment decisions.  What not spent yet is relevant.

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  • Posted: 18 December 2011 06:57 PM #6

    He mentioned something to the effect that the writers have already made their money on old options, so the seemingly high 400 strike is not as relevant now. I’m not knowledgeable in that area.

         
  • Posted: 18 December 2011 07:30 PM #7

    Mace - 18 December 2011 10:42 PM

    Mercel, Gregg,

    My interpretation of what Travis said is AAPL would tend towards $400 by Jan OE.

    Candlestick pattern is bullish harami.

    I’m not sure $20 qualifies as “much higher.”  Nonetheless, I’ll take $400 in this market.  He also made the point that the number of calls at $400 for Jan OPEX does not necessarily limit the upside beyond that.

    He inferred that Jan 21 2012 option expiration will occur before earnings.  Apple hasn’t announced the day of FQ1 2012 earnings but with the extra week in this quarter, he’s probably going to be right (i.e. the earnings call will be scheduled AFTER Jan OPEX).  Any thoughts from others?

         
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    Posted: 18 December 2011 08:29 PM #8

    Mercel - 18 December 2011 11:30 PM
    Mace - 18 December 2011 10:42 PM

    Mercel, Gregg,

    My interpretation of what Travis said is AAPL would tend towards $400 by Jan OE.

    Candlestick pattern is bullish harami.

    I’m not sure $20 qualifies as “much higher.”  Nonetheless, I’ll take $400 in this market.  He also made the point that the number of calls at $400 for Jan OPEX does not necessarily limit the upside beyond that.

    He inferred that Jan 21 2012 option expiration will occur before earnings.  Apple hasn’t announced the day of FQ1 2012 earnings but with the extra week in this quarter, he’s probably going to be right (i.e. the earnings call will be scheduled AFTER Jan OPEX).  Any thoughts from others?

    they unfortunately aren’t going to announce the earnings release date until January.  then we’ll know, before OpEx or after.

         
  • Posted: 18 December 2011 08:40 PM #9

    kloot - 19 December 2011 12:29 AM

    they unfortunately aren’t going to announce the earnings release date until January.  then we’ll know, before OpEx or after.

    The question is whether they announce earnings (in Jan.) before or after Jan OPEX (Jan 21, 2012).  I am hoping they announce before OPEX.  Unfortunately, I don’t think it will happen given the extra week in FQ1 2012.

         
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    Posted: 18 December 2011 08:41 PM #10

    mountainpeaks - 18 December 2011 10:45 PM

    Travis makes a distinction between very old and most recent purchases of calls/puts. I don’t understand the mechanics of that, but he’s been doing this for many years.

    Let’s say you bought a $400 Jan 13 call right now. The B/E on OE for that is $449. The B/E on OE for a Jan 14 $400 call is $474. So merely breaching $400 for anyone holding long $400 calls for a year or two is far from a profitable trade. Death by theta-bunga!

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    Posted: 18 December 2011 08:56 PM #11

    JDSoCal - 19 December 2011 12:41 AM
    mountainpeaks - 18 December 2011 10:45 PM

    Travis makes a distinction between very old and most recent purchases of calls/puts. I don’t understand the mechanics of that, but he’s been doing this for many years.

    Let’s say you bought a $400 Jan 13 call right now. The B/E on OE for that is $449. The B/E on OE for a Jan 14 $400 call is $474. So merely breaching $400 for anyone holding long $400 calls for a year or two is far from a profitable trade. Death by theta-bunga!

    even this moribund market expects AAPL to be above that level by then.  but if you don’t want to deal with theta, look at vertical call spreads.

         
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    Posted: 18 December 2011 09:01 PM #12

    Gregg Thurman - 18 December 2011 10:12 PM

    What I see is virtually equal demand for the JAN 400 and 405 Calls since then (10,620 and 10,836 respectively).  With a price of $5.40 at the close Friday, buyers of JAN $405 are expecting an AAPL valuation greater than $415 (100% ROI).

    On the other side of the coin, Put OI skyrocketed at the $380/$385 Strikes, easily exceeding Call OI at $400/$405.  Their pricing and volume suggests a much greater sentiment to the down side.

    Implied Max Pain is ~$395.

    OI in the $340 to $440 range is:

    Calls: 38,356
    Puts: 56,732

    Note that the OI I display is after zeroing out all previous OI one week ago.  IOW, this is the OI originated in the last 7 days.

    Hmmmm…possible iron condor?  Traders selling premium to take advantage of the range roving / theta decay?

    This is the kind of strategy (with monthlies, traded like weeklies) that I think you may like better than weeklies…so your last post in Weekend Updates made me smile—thank you for indulging me!! smile

    [ Edited: 18 December 2011 09:07 PM by lovemyipad ]      
  • Posted: 18 December 2011 09:25 PM #13

    Mercel - 19 December 2011 12:40 AM
    kloot - 19 December 2011 12:29 AM

    they unfortunately aren’t going to announce the earnings release date until January.  then we’ll know, before OpEx or after.

    The question is whether they announce earnings (in Jan.) before or after Jan OPEX (Jan 21, 2012).  I am hoping they announce before OPEX.  Unfortunately, I don’t think it will happen given the extra week in FQ1 2012.

    I was thinking the same exact thing the other day.  That could be a big blow to those holding January expirations. 

    Bean counters:  Will the holiday and the quarter ending on a later date push the report date back or not?  If you had to bet on it?  Don’t they have an iPad app that builds the report??!  They just shake the iPad after the quarter ends and the numbers update.

         
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    Posted: 18 December 2011 09:27 PM #14

    kloot - 19 December 2011 12:56 AM
    JDSoCal - 19 December 2011 12:41 AM
    mountainpeaks - 18 December 2011 10:45 PM

    Travis makes a distinction between very old and most recent purchases of calls/puts. I don’t understand the mechanics of that, but he’s been doing this for many years.

    Let’s say you bought a $400 Jan 13 call right now. The B/E on OE for that is $449. The B/E on OE for a Jan 14 $400 call is $474. So merely breaching $400 for anyone holding long $400 calls for a year or two is far from a profitable trade. Death by theta-bunga!

    even this moribund market expects AAPL to be above that level by then.  but if you don’t want to deal with theta, look at vertical call spreads.

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  • Posted: 18 December 2011 09:31 PM #15

    StillLong - 19 December 2011 01:25 AM

    I was thinking the same exact thing the other day.  That could be a big blow to those holding January expirations. 

    Bean counters:  Will the holiday and the quarter ending on a later date push the report date back or not?  If you had to bet on it?  Don’t they have an iPad app that builds the report??!  They just shake the iPad after the quarter ends and the numbers update.

    It’s more likely the report gets pushed back, despite the fact that OPEX falls on a generally favorable 21st day of the month following quarter’s end.