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Weekend Updates
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Pikes, your strategy is less “sexy” but I think you’ll be more than fine unless the market goes totally bonkers. Stock replacement strategy isn’t the cheapest but it’s a great risk mitigation approach if you have the capital. Nice trading!
[ Edited: 18 August 2012 05:09 PM by Mav ]Signature
The Summer of AAPL is here. Enjoy it (responsibly) while it lasts.
AFB Night Owl Team™
Thanks, Steve. -
Well, my order to sell half of my Jan14 $330 LEAPS filled at my stink bid of $320 right near the end of the day, Friday. Made a tad over 40% on those. I bought them in May, when AAPL was at $530 or so. Hopefully the remaining half will continue to rise, but I wanted to take a bit off the table and reduce my stress a bit. I now have plenty of cash to participate in any retracements or WTF sales.
I think my next set of LEAPS will be a bit closer to ATM, maybe just $50 or so ITM versus $200 DITM.
Big congrats on your DEAP’s! 8-)
FWIW, I would urge members to research the total “return” on $200+ ITM DEAPs. For example, you can purchase 2014 $400’s for a very low $12 premium right now. These pups track the share price virtually 1:1 and cost only 40% of the share price. That’s a pretty nice bit of leverage with a LOT of time/depth protection. JMO ~~~~~~~~
edit: The 2015’s will be available in about a month.
cheers
JohnG -
I am going for the 960 and will get 1700%. :-D
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I am going for the 960 and will get 1700%. :-D
I’ll assume your 1700% is on the 14’s.
Current:
Bid 17.60
Ask 18.00We’ll split the diff and call the current “cost” $17.80 with a break even price of $977.80 at expiration in Jan 2014. Anyway, 1700% return on a cost of 17.80 gets us an additional $302 which puts the share price at $977.80 + $302.6 for a grand total of 1,280.40 in late Jan 2014. Hot damn!!! 8-) I’ll take some of dat too!
cheers
JohnG -
$1200+, huh.
Let’s get past $700 first.
What assumptions are you using for a $1200 target price by January 2014 anyway? The way WS values Apple, you’d need, I dunno, a 75%-100% increase in ttm EPS.
Signature
The Summer of AAPL is here. Enjoy it (responsibly) while it lasts.
AFB Night Owl Team™
Thanks, Steve. -
This is…interesting.
I thought I’d heard something about a tweet about a potential pullback or something from the same person?
Also interesting is that this article was _before_ Friday, which brought AAPL to a no-asterisks-required ATH.
[ Edited: 18 August 2012 07:14 PM by Mav ]Signature
The Summer of AAPL is here. Enjoy it (responsibly) while it lasts.
AFB Night Owl Team™
Thanks, Steve. -
This is…interesting.
I thought I’d heard something about a tweet about a potential pullback or something from the same person?
Be more explicit Mav, cut the cryptic stuff.
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Please, this is hardly the level of cryptic I see around here sometimes.
Also, I actually _am_ a little fuzzy about exactly what the tweet said (from Zaky, who’s also mentioned by PED in the Fortune blog post). RG posted about it somewhere on Intraday a little while back. I didn’t want to be precisely imprecise.
Signature
The Summer of AAPL is here. Enjoy it (responsibly) while it lasts.
AFB Night Owl Team™
Thanks, Steve. -
$1200+, huh.
Let’s get past $700 first.
What assumptions are you using for a $1200 target price by January 2014 anyway? The way WS values Apple, you’d need, I dunno, a 75%-100% increase in ttm EPS.
Of course, this is a trade that loses 100% if AAPL closes at $950 in January 2014. How many ways could a spread make 5X your money in that scenario? Even closing at $825 in Jan 14, a 785-800 doubles.
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We filed for over 200 patents for all the inventions in iPhone and we intend to protect them. — Steve Jobs, 2007
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I “get” Zaky-speak. What isn’t clear? I’ll try to translate.
RE: that previous post about the pullback…again, pullback means around 23.6% to 38.2%. That really isn’t as big as it sounds; in fact, it’s pretty damn shallow. We’re not talking 23.6% off total share price, only the incremental advance. For example: up 100 points, back 25 points, up another 100 points. Right now, this upwave is 68.61 points. From right here:
Ret % Points PPS
0.236 16.19 622.42
0.382 26.21 612.40
0.500 34.31 604.31
0.618 42.40 596.21
0.786 53.93 584.68
1.000 68.61 570.00 -
OK, found the original post, so I’m clear on it again. Mercel actually quoted the tweet from Zaky, not RG:
I was referring to this earlier in the week:
From Bullish Cross (Andy Zaky) on Twitter:
?I think Apple will top out tomorrow after the open. I think we could see $632 to $633 in the AM. We could get a test of the highs?. (Presumably 644)
?Yet, after testing the highs, the stock will see a much larger pullback. After that, we will see another rally to take out the highs.?
The market call was a little off. No big deal. It’s the note from Zaky that doesn’t quite jive: http://tech.fortune.cnn.com/2012/08/17/apple-hits-a-new-all-time-high-of-636-54-in-fear-driven-rally/
IMHO, there’s dissonance between Twitter - “much larger pullback”, client note - “700 could be coming much sooner than expected”. Just a change of position?
[ Edited: 18 August 2012 08:35 PM by Mav ]Signature
The Summer of AAPL is here. Enjoy it (responsibly) while it lasts.
AFB Night Owl Team™
Thanks, Steve. -
In the interest of sharing stories of stupid clerical mistakes… I’m currently in the penalty box for something I did late Friday afternoon. This—by pure, dumb luck—happened to work in my favor, but it could have just as easily gone the other way with disasterous consequences…
I *thought* I was in my “paper trading” account in Trade Monster. Bought 10 AUG’12 645 calls which were “dailies” or even “hourlies” at that point. Now, I trade from ONE laptop, and I have at minimum eight charts and eight programs open. So I have multiple conversations going on (in skype), and I’m watching multiple charts in multiple timeframes. So I glance over at the stock price…yep, still going up…okay, let’s see where the weekly is… “Oh, look, up a point, okay, well, I’ll just close it and ‘paper’ open something for next week.” So I do that, and I’m scoping out another trade, and I go to place that one and happen to look at the cash balance which is low, considering that I am so paper loaded I could afford my own paper island and two. That’s when I realize: f-!!!!!!! I placed that trade in a rarely used, not-a-lot-of-cash-to-spare-would-never-ever-risk-buying-weeklies REAL account!!!
Geez, it’s a good thing I even CLOSED the trade…or I’d have 100 shares sitting in an account that barely has the cash for a few shares!!
Dodged a bullet. Banked some coin (I didn’t deserve). Landed myself in the penalty box for not paying attention.
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That’s hilariously…awesome. :bugeyed:
Am I missing something here? Aside from winning the Friday lottery, your dilemma would be choosing to buy $648,000 in AAPL at a slight discount
or just letting your option expire, because you _are_ talking _American_ option/exercise rules, right? We’re talking regular ol’ CBOE options, aren’t we?Signature
The Summer of AAPL is here. Enjoy it (responsibly) while it lasts.
AFB Night Owl Team™
Thanks, Steve. -
Phoebear611
- [ Ignore ]
Similar thing happened to me except I missed it and over that particular weekend they exercised my in-the-money calls. Thank God the stock was up when I realized what had happened. Made about half a point but almost passed out in the interim.
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Keep Calm and Carry On
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OK, found the original post, so I’m clear on it again. Mercel actually quoted the tweet from Zaky, not RG:
I was referring to this earlier in the week:
From Bullish Cross (Andy Zaky) on Twitter:
?I think Apple will top out tomorrow after the open. I think we could see $632 to $633 in the AM. We could get a test of the highs?. (Presumably 644)
?Yet, after testing the highs, the stock will see a much larger pullback. After that, we will see another rally to take out the highs.?
The market call was a little off. No big deal. It’s the note from Zaky that doesn’t quite jive: http://tech.fortune.cnn.com/2012/08/17/apple-hits-a-new-all-time-high-of-636-54-in-fear-driven-rally/
IMHO, there’s dissonance between Twitter - “much larger pullback”, client note - “700 could be coming much sooner than expected”. Just a change of position?
Yeah, “much larger pullback,” very likely has a different interpretation if you aren’t following Bullish Cross. “Much larger” to me means more than 10 points (which is what we had from 638 to 628). It doesn’t necessarily mean 50+. Usually, there is more resistance at key resistance, but we had far more resistance in that 620 area…this 640 area wasn’t much of a barrier.
He expected more of a pullback-slingshot through 644, catapulting up toward 700, which probably would have been healthier since now we’re going to hear the “p” word again…
Anyway, nothing incongruous in the messages to me. Ever since we took out 620, he expected a run for 700…just not sure HOW we get there. It’s like chess. Many different ways it could happen, but Mr. Market always gets the pivotal moves.
