Options players and shareholders alike are welcome to discuss where to go from here on this remarkable day…in a completely non-advice way of course

Me, it’s basically just the LEAP BCS and my AAPL common while I try and figure out the next move.  I don’t think any of us expected this kind of upside move today.

Bought today:
May $595 Calls at $3.45

May $585/$600 Call Spreads at $1.25

Ratio of 1:45

The Spreads will pay for the acquisition of the shares, and then some.  My target for May expiry is $635.00.

I had some bull calendar spreads… Jan13 430s/Mar12 480s. Just rolled up the short leg to Jan13 530s, which gives me a return of 340% if AAPL is above 530 next Jan.

I’m still 60% cash. Waiting for the mythical pullback to buy or leg into more Jan13 BCS.

Gregg Thurman - 09 February 2012 01:25 PM

Bought today:
May $595 Calls at $3.45

May $585/$600 Call Spreads at $1.25

Ratio of 1:45

The Spreads will pay for the acquisition of the shares, and then some.  My target for May expiry is $635.00.

Gregg, how did you calculate $635 for May?  Thanks.

I continue to hold:

Jan 2013 $400 LEAPS acquired last year for an average price per contract of around $5,500 if I recall correctly - they are close to doubles

Jan 2013 $450 acquired on Jan 31; up 43%

Jan 2014 $600 LEAPS acquired Feb 6, up 55%

I am going to continue holding them.  Cash has shrunk to less than 10% of those two accounts, which makes me a little nervous, but we’re up 79% for the year as of 30 seconds ago, so I am not changing anything yet.

We are way ahead of where I thought we would be now.

Next decision point, do I hold it all over the weekend.

alice - 09 February 2012 01:51 PM

Gregg Thurman - 09 February 2012 01:25 PM

Bought today:
May $595 Calls at $3.45

May $585/$600 Call Spreads at $1.25

Ratio of 1:45

The Spreads will pay for the acquisition of the shares, and then some.  My target for May expiry is $635.00.

Gregg, how did you calculate $635 for May?  Thanks.

By applying historic trading action to current pricing.  I should note that AAPL has exceeded historic trend by 188% (on average) since the Monday after earnings, so that $630 estimate may prove to be conservative.

At some point I’ll probably look into May/Jul 12s.  For now I have my LEAP BCS and my small May 12 440/460 BCS.

It’s hard not to take some profit today. In my case that means selling some options and buying common. Instead of going to cash, I de-lever by moving options proceeds into stock. I like to think of AAPL as a currency.

And a fine currency it is!

At my potential, gains-losing “peril”, I think I’ll stay in “wait and see” mode until tomorrow.  There’s bound to be some profit-taking soon, though I guess I could’ve also said that 40 bucks ago (glad I didn’t quite think that way).

Sitting with a bunch of bcs with wide spreads. Varies between 450 to 620 for Jan 13. Also holding $400 Jan 13 unhedged. Yesterday opened Feb 460 capped it with a $495 mid afternoon, great timing, but more like great luck. Still 40% cash waiting for a pull back. We’ll see what tomorrow brings. Good Luck to all!!

I’m at something like 55-60% cash right now - somewhat distorted by the increase in value of my LEAP BCS, which I probably should just leave alone for the rest of the year.

Sure seemed like some “weakness” after the 496 peak.  We’ll see.  In the meantime, fun stuff!

Apple II+ - 09 February 2012 02:57 PM

I like to think of AAPL as a currency.

You’re the third person to declare AAPL as a currency.  Firestorm and me, now you.  One share of AAPL can buy me 33 good meals in a restaurant.  Everything seems to deflate relative to AAPL.

Do nothing till next earning.  I need a rest from high wire (mav - did you trademark this word?) trapeze.  Call replacement portfolio is a joke while the other larger AAPL only stock portfolio says more .

Mav - 09 February 2012 06:33 PM

I’m at something like 55-60% cash right now - somewhat distorted by the increase in value of my LEAP BCS, which I probably should just leave alone for the rest of the year.

Sure seemed like some “weakness” after the 496 peak.  We’ll see.  In the meantime, fun stuff!

Mav, I concur with Mace on the non-advice to just leave your JAN’13 LEAP spread in place.  Don’t touch it.  That will always be part of your upside protection this year, so you will never feel like you don’t have something in the game.

It’s gonna hurt, I know it - but I’ll try my best to let the BCS grow and hopefully realize at least most of its potential.

Helps that my account had one heck of a buffer day, so the inevitable volatility won’t sting as much. 

It ALSO helps that the bid/ask spreads for LEAPs make for very effective handcuffs.  You can give up so much just trying to get out.