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Apple Inc. Message Board

  • spiceykit spiceykit Feb 1, 2008 12:29 AM Flag

    option trade for a 2nd half turnaround

    write 100 contracts of the aapl jan 09 370 call and get 6000.00 and use the 6000.00 to do a 100 contract jan 09 260 to 270 call.

    you are even if aapl closes below 260 in jan 09.

    you get a profit if aapl closes above 260, with max of 100k at 270 or above.

    but if aapl goes over 370, you start losing some profit back and you start to really lose money if aapl goes much above 380.

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    • By writing 100 contract of 370 calls, you would make $6000 no doubt, but with that you would be able to buy only about 25 contracts of 270 calls... which means you would go naked on 75 calls.

      The spirit of your suggestion is valid, but again, with the 100-/30+ spread, your gains will be wiped out when the price reaches around $410. And ... then you make a loss of $7500 (yes $7500 !!) for every $1 rise of price above that point...

      Are you up for this ?

 
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