$12.50 tax deferred and $6.50 taxable in 2016....posts are time and dated weeks before Jan 27
Same game plan on April 22. Keep the original $12.50 in your pockets and use $3.50of Feb 6 profits, just before close on April 22. to buy only one May 1call for every Jan 2016 covered call previously sold before or on Jan 27.
If the stock runs, you close out the sale of the covered call for a"paper tax loss" keeping the original $12.50 in tax deferred cash.
Buy the $110 call for $19.05
Sell the $120 call for $13.30
Net = $5.75
Potential Profit is $4.25 if AAPL closes above $120
$115.75 is your break een..above it you make money.....below it you loose money
this is the Da Vinci principle...this is 10% between now and third week of Jan 2016.
If the stock runs..who cares!
If the stock falls, you wait then trade down or do nothing for it will rebound
"Zorro had Z; WE have V"
last year, IBB has these gyrations then sky rocketed higher.
shorts and longs "wet their beak"
you can then walk the action down then back up
Have a great weekend
How many times does Wall Street drop AAPl down to $122 only to rally it back to $129..?
They triple their fun by first selling calls and buying puts then reversing this trade.
This is why HEDGE FUNDS like AAPL. it is the most money making stock in the market.
This always happens at a mile marker. Years ago, it was $600 price action
this is almost like calling in artillery on the perimeter in a combat zone.
Yesterday IBB was $360 and the Jan $380 sold for $20...today these sell for $14 - $17 So if you had sold them the change in the IBB price would had been covered by the sale of those Jan $380 calls
on Jan 27 stock was bought for $109+
By Feb 6, $19 cash was put in your pocket.
Now on April 22, you have $19 to play with playing upside action.