the perfect strategy is to "play from behind" as I discussed a thousand times last year
there are hundreds of millions at risk.
Never forget this point.
When everyone is going one way, it is best tow go both as I earlier discussed.
The option players will exaggerate the action after earnings. There are hundreds of millions at stake.
A simple $3.45+ can give you 100% upside and downside action.
1. If a shareholder and you do not want to sell long term calls for $12.50 a share. Buy a Feb 06, present strike rice put at 1530 hrs. I think buying puts is a waste of time but the upside action should cover this loss. Then after a run you can sell Jan 2016 calls for $13 at strike price.
2. If you sold a Jan 2016 covered call for $12.50 a share, buy the present market price Fen 6 call for $3.45. Your net is $9.50, cash in your pocket now and downward hedge while you have 100% upside action.
3. If you sold puts. Jan 2016 $90 puts are now 60% profitable, Only if you have to money or desire to buy AAPL at $80 leave this trade on. This is NOT a bearish outlook just a technical one. You can look at other Jan 2016 puts to sell. Simply subtract the premium from the strike price to determine your buy-in.
4. Every call spread that I posted a week ago is up 50+%. This is a bullish play. Before 1600 hrs, some will walk away from the table just a little hungry.
Two years ago, before earnings I suggested to sell both sides of the present market price. It was a disaster. People did not know what they were doing. Since then I post to the level of that crowds.
I also had suggested buying the $110 calls but selling the $115 calls for a net of $2.
I think these are also up 50+%.
When the net spread is $5..that is the max. profit.
WE will look at these at 1530 hrs
When I suggested a call spread to buy a $107 call then sell a $112 call.
This was a limited $5 play that played the upside not the downside. at the time that I posted I believe they had 150% upside potential....Since then they are already up 50+%
I read here how someone was posting AAPL would not go past $113. I never said that
I have posted it multiple times.
By the way, the sale of the Jan 2016 $90 puts is now 60% profitable, once again. last week, it was only 30%.
A few weeks ago I suggested a few call spreads when you buy a low strike price then sell an uppers strike price to capture the max net spread which is $5, $10, etc.
This is NO way has a bearing how high the stock will go.
It is a percentage play as I posted.
Once again, if you try to read something into what is not there you get in trouble
call spreads, sale of "out of the money" puts and Da VINCI all benefit if the stock runs.
However, many will close out some of these just before the close on 1/27. Others will not.
Remember if everyone is on one side of the boat it tips over. Have a balanced approach,
With options NEVER use your own money
If you are a shareholder and do not want to do the above...your money' your decision.
I never suggested buying puts...never
This past week, NFLX Jan 2016 $355 calls sold for $54 going into earnings. Some sold these before the earnings release. Happy with the $54/$348 = 15.5% return on the eve of the earnings release. Second day after release, NFLX ran well past the giveaway at $355 +$54 = $409 to $432.
Going into AAPL earnings, the same can happen. If you sold a Jan 2016 covered call for $12 to $13 a share and want 100 % upside action you can simply buy a Feb 6 call at present market price on Tuesday before close. The cost would be $3+. So the net tax deferred cash you keep is ($12- $13) - $3.50 = approximately $9+.
This $9+ is meant to be kept in your pocket not gambled away. IF you sold one Jan 2016 call for $12+ please do not buy more than one Feb 6 call for $3+.
This happened two years ago and it was a disaster. Why? Wall Street hates retail!.. One must always respect risk
This is a simple concept. You must own the stock to play.
posts are time and dated using real numbers not words.
Numbers are not open to debate
I did post to close out sale of puts if you did not have the money or desire to buy the stock....of course the Sale of the Jan 2016 $90 puts at $10 would have you buying the stock at $80..35% discount to market.
then AAPL with $150 billion is a big defender of their stock