This week’s Apple trading strategies (11/11-11/15)

A place for Apple traders and investors to share their best ideas.

To get things rolling, here’s a long (14:35) CNBC feature on how Tim Cook charmed Donald Trump:

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

7 Comments

  1. Gregg Thurman said:

    It would appear that I bought my Put Spreads a day early, I’m down almost 50%.

    Nevertheless, with a break even of ~$258 (includes time premium) I feel a $2.xx decline in AAPL very possible, caused by investor fatigue at these lofty levels. Such a decline would more than erase my losses. Here’s hoping.

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    November 10, 2019
  2. Fred Stein said:

    Buy backs and patience drive my strategies.

    1) Buybacks and the Cork effect: Buybacks create a cork effect in that whenever fear drives the price down in the short term, the buy backs increase EPS long term. Eventually fear subsides and the stock pops up.

    2) Patience and Rope-a-dope: Even a mistake can be reversed by trading one option contract for a future version of that the option contract. This approach works poorly if the option trade is based on fear or greed. But fear and greed always mess up investors.

    3) Unpredictable upside: While long term AAPL’s upward increase is assured (IMHO), the short and mid term path is volatile.

    How this works: When fear grips the market, sell long term puts at 10% or 20% out of the money. Keep selling, patiently, as long as the stock remains depressed. Rarely, when AAPL is near or above consensus, sell long term calls at a 10% to 20% premium. With this call selling strategy, rope-a-dope comes in.

    Has this worked? I’m looking a bunch of naked puts ranging from $140 for Jan 2020 to $215 for Jan 2022. Great!. Disclaimer, I do have some covered calls that look pretty dumb right now.

    What to do now? Maybe buy back a few naked puts, or rope-a-dope a couple covered calls.

    1
    November 10, 2019
    • victor castroll said:

      Fred Stein. With all undue respect, you know just enough to be dangerous. To whom? Your net worth. You have no idea wtf you’re talking about. What you just described is called Gamblers Ruin and a sure fire away to take a machete to your FICO. But, you were successful in one thing. Quite possibly the most idiotic trading strategy I’ve ever read. I just ordered a massive bunch of movie popcorn off Amazon to watch your financial suicide. God help you if you’re legit doing your above “trading strategy” in size. If you truly are, I urge to back the F out of the stupidity you walked into. Really, you might as well take a bic lighter to your financial and mental health.

      And PED, i’d put a kibosh to this “casting call” for investor and trader idea thread. No CYA is big enough to prevent your hippie ass from getting sued when the shit hits the fan with the inane stupidity posted above. This post above will make Zaky look like a paper boy in a world where PED becomes Nero. Really man. End this drivel.

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      November 11, 2019
  3. Kathy Corby said:

    Hey Fred, might be a good idea to make it clear that you were talking about selling calls against shares you already own, as in a covered call, and not selling naked calls. God help the unsophisticated option trader who tries that.
    Worst that can happen with a covered call is that your stock gets taken away, and you have to sell puts to get it back. I have heard this called “the righteous circle”, and is usually pretty profitable.

    Worst that can happen with a naked call is that you have to go back to work after retirement, because you have blown up your IRA.

    3
    November 10, 2019

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