some stocks you trade while others you just put away for life.
It is like that racehorse who goes 10 years never winning a race until his 11th year, when he is unbeatable
I always thought that both the 82,500 $47 puts and $55 calls were sold for $106 million...if this was so, $90 million has already been realized
but it is now evident that the $47 puts were sold to buy the $55 calls..so the profit to date is now $140 million
all along I thought that both the 62,500 Jan $37 puts and $55 calls were sold for $17..
BUT it appears, the $47 puts were sold to buy the $55 calls...the profit is now $140 million and climbing
Here is the scoreboard:
My rule was always close out the sale of any option once it falls 50%.
So when the Jan 2015 $550 calls fell from $55 to $26...these could have been closed out at $27.50. THen when they ran once again to $50..sold for a total of $27.50 + $50 = $77.50
But there were purchases: the Feb $550 call was bought for $18 and the JUly $485 put for $11...so.....$77.50 - $29 = $48 real cash a share in your pocket.
this was played on an ooen forum on three web sites
AAPL: $550 to $493 back to $551 and now ..?
Jan $550 calls: $55 down to $26 back to $50 now..?
I gave a suggestion last week when I first discussed this potential problem. I pay attention to the little things.
was if one sold the Jan 2014 $520 call for $70 in Dec 2012....upon expiration, stock was $540..so $50 profit on sale of 12 month covered call but that other $20 went to stock appreciation for AAPl was $540 on Jan 2014 option expiration.
so far in the past six weeks...Jan 2015 $550 calls traded from $55 to $26 to $50 and are now ?...$35?..some have played this see-saw for $50 to $80 thus far alone while holding the stock
have you noticed not one option play that I ever suggests cost a person their own money. That is the difference between me and most.
Anytime I recommend buying an option it is only after I suggesting selling a high premium call.
there are many ways to profit in the stock market.
many strategies are posted as ideas...play one on paper and if it is in your RISK TOLERANCE...play it.
My boxing couch ( i dedicated my book to him.) use to number the combinations as he taught me. When we got to number 71, I asked " Why are you showing me so many combinations?" Phil replied , "I do not know which ones will fall natural to you. So, I must teach you everything."
I bring the same philosophy to these message boards
My money punch was "he lefthook. I starched more people with it when confronted.
Have a nice day
the trade made $90 million...People who jumped on it after I posted did as well.
I spotted the trade and argued why it made sense to sell both..many disagreed. I was correct
the beauty of this OCT FB trade was using options with high premium
it put $17 in your pocket. This in turn lifted the giveaway to $55 + $17 = $71 rather than $55 + $8.50 = $63.50
and lowered the buy-n to $47 - $17 = $30 rather than $47 - $8.50 = $39.50
the trick to selling options is to sell options with real premium...10%.
you are correct! Makes no sense in trading options for"chump change". for years, I have shown the merits of playing with long term options.
Mathematically, the return is so much higher..more importantly, it CUSHIONS the ERROR VARIANCE.