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Apple Inc. Message Board

  • gtb200 gtb200 Apr 12, 2013 12:05 PM Flag

    It is easy to say sell now and buy back under 400-350. My entry was $600---please teach me what do to?

    my whole apple and only half----the other half Tim stole,,,

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    • Wow so many thumbs down. I gave you a honest post but everyone seems to hate it. I wish they would tell me why.

    • No one know what the earning will look like and what the stock will do. So here is what I would do in your situation.

      1. Sell the shares and take the losses.
      2. Buy the same amount of May 18 $430 calls for about $18 each. It means if you originally owned 100 shares, buy 1 call. This trade is to limit risk but still get exposure to earning play. So don't buy more than what you originally owned or you will be adding risk rather than limiting it.
      3. If you want to buy back under $400 on a earning selloff, than sell the same number of May 18 $400 put for about $7 each. This will reduce the cost of the $430 call you bought to $11.

      Example and execution
      If you own 200 shares, sell them now for $430 and receive $86,000 and take $34,000 losses for this tax year.
      Buy to open 2 contracts of May 18 $430 calls for a total of $3,600.
      Sell to open 2 contracts of May 18 $400 puts for a total of $1,400.

      If earning is good and the stock pops, sell to close 2 calls for gain, buy to close 2 puts for gain. If the stock breaks out of resistance and reestablish uptrend, buy the stock back.

      If earning is poor and the stock drops, sell to close 2 calls for loss, wait for puts to get assigned on expiration which will buy you 200 shares of stock for $400 each.

 
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