This week's Apple trading strategies (10/14-10/18)

A place for Apple traders and investors to share their best ideas (Apple touches $237.64 edition).

To get things rolling, here are  MKM Partners' JC O'Hara and Michael Bapis of Vios Advisors talking about how to trade Apple as it neared its all-time high.

Apple one of the best long-term stocks out there: Market pro from CNBC.

Disclaimer: Having never owned or traded Apple, I have nothing to add. Don’t blame me if you drain your IRA doing something you read about here.

See also: Last week's Apple trading strategies.


  1. Gregg Thurman said:
    Implemented my strategy on Friday.

    Bought NOV 1 $227.50 Calls at $11.20 (currently trading for $12.48). I’m expecting three events to occur between now and then:

    *Some kind of trade agreement that makes WS happier (worth $7.50 bump),
    *Apple reports Earnings that exceed expectations (my REV estimate $64.436 Billion and EPS estimate $3.02, both posted on on July 30, 2019)
    *Apple guides implied FQ1 revenue in excess of $90.000 Billion (worth 1.5% bump).

    October 13, 2019
  2. Kathy Corby said:
    Well, Gregg, from your lips to God’s ear, but… for those who want to use options but would prefer a safer strategy than buying long calls that expire two days after earnings… remember that the strategy that Gregg described needs AAPL to close at $240 on the day of options expiration in order to even make a buck or two of profit– you get this by adding the strike price of 227.50 and the cost of the options, which as Gregg described, is about 12.50 right now. What makes me fear we may not see that price is, curiously, the bullishness of the market right now. It is easier to beat low expectations than raised ones, and we are looking at some pretty high earnings expectations. Failure to meet those expectations will see the stock drop. And as we all know, that is a real possibility– given that the stock price only marginally and intermittently reflects the real value of the company.
    So– if you are bullish on AAPL and would like to use some leverage, but are not quite as optimistic as Gregg, consider 1. selling cash secured puts if you want more stock, 2. selling put spreads if you think the stock will go up or at least not go down much and you would prefer defined risk, 3. buying calls out in 2020 or 2021, perhaps in the money– you will still profit mightily if the stock goes up but you will not run the risk of complete loss of your options investment if the market fails to push AAPL over $240, or 4. buying ATM covered calls– buying the shares but simultaneously selling an ATM short call. The stock will get called away if it is above your short call, but you will still make a handy few percent on a pretty short term investment. And if the stock drops, well, you bought it for cheaper, and you can keep selling calls against it and collecting the dividends while you wait for it to head up again. I won’t discuss butterflies, condors, or calendars/ diagonals, because if you are thinking about those, you don’t need advice from me.
    Bottom line– don’t risk more than you can afford to lose, because the market can remain irrational longer than you can remain solvent.

    October 13, 2019
    • Gregg Thurman said:
      Very well written Kathy.

      October 13, 2019

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