AAPL
So with AAPL quickly hitting my max loss today there was no sense in closing the position. I will be waiting this one out hoping to catch a break unless the 260 call gets exercised against me. Options guru Paul has generously given me some ways to try and unwind this with less pain, but thanks to ONP's 10% run today I'm just going to lick my wounds and put the money into something I know better once I close it out.
ONP
"You down with ONP?" "Yea you know me!"
ONP made a huge 10% run today and 20+% run so far this month! I know some of you have taken profits and will look to ride this train next time it pulls back which would be wise to do since this one has been going on these 20% up and downs for months now. A better play would be to sell the 12.50 calls for $1.53 (bringing your cost basis down 14%!!) to lock in profits at this level and still have potential for another 15% in profits. So if you made 20+% like I have done this month on ONP you could set yourself up for a 50% gain if the stock goes to 12.50 and gets called away!
Thanks Naughty by Nature for the inspiration and Paul for the laugh today on the OPP take!
Friday, April 23, 2010
Thursday, April 22, 2010
Apple
Well the past two days have been ugly for people like myself standing in front of the herd. We have been trampled by the sheep, but aren't dead yet. There are still 28 days remaining on my position and since we are inching closer to my max loss at 270 I am going to ride it out for now and not close it out as planned unless the herd retreats and I can get out anywhere near even money. Since a majority of shares are institutionally owned I am looking for prudent money managers booking profits at this point to help me out. Also there is still a good chunk of time premium being paid for these calls that will erode quickly if I can make it closer to May expiration or have downward pressure on the stock.
Thursday, April 15, 2010
Updates
ONP
So I managed to sell the Nov 12.50 call for $1.15 against a portion of my shares this morning. This covered call is a typical safe option play to lock in some profits in case the stock slides down again as it did today. I basically was paid $115 per contact this morning to give someone the option of buying my shares for $12.50 per share between now and November. If the shares go above 12.50 and gets calles away selling at $12.50 would leave me a 34% profit. If they never get to $12.50 I still get to keep the $115 per contract! A definite easy money play if you ask me!
AAPL
So AAPL has continued the creep higher for the past few days, about 2.5%, but is still below my break-even of $161. All the news coming out seems pretty negative like the lawsuit that could stop the sale of all AAPL's touch screen device sales, the lack of 3g devices, overseas launch delay, and the fact that they just aren't selling enough Ipads to be meaningful to the bottom line. With all this the sheep keep grazing on AAPL and even have the wool to attack any naysayers! In the next coming week, with earnings on Tuesday, we will see if the sheep get slaughtered, as I expect, or if they just trample me on their way to $170. Stay tuned this should be interesting!
So I managed to sell the Nov 12.50 call for $1.15 against a portion of my shares this morning. This covered call is a typical safe option play to lock in some profits in case the stock slides down again as it did today. I basically was paid $115 per contact this morning to give someone the option of buying my shares for $12.50 per share between now and November. If the shares go above 12.50 and gets calles away selling at $12.50 would leave me a 34% profit. If they never get to $12.50 I still get to keep the $115 per contract! A definite easy money play if you ask me!
AAPL
So AAPL has continued the creep higher for the past few days, about 2.5%, but is still below my break-even of $161. All the news coming out seems pretty negative like the lawsuit that could stop the sale of all AAPL's touch screen device sales, the lack of 3g devices, overseas launch delay, and the fact that they just aren't selling enough Ipads to be meaningful to the bottom line. With all this the sheep keep grazing on AAPL and even have the wool to attack any naysayers! In the next coming week, with earnings on Tuesday, we will see if the sheep get slaughtered, as I expect, or if they just trample me on their way to $170. Stay tuned this should be interesting!
Tuesday, April 13, 2010
ONP Alert Again!
ONP has made another 17% for us and we can now take profits again. Now that Ive ridden this stock up 15%+ twice I can afford to leave some on the table in case this one runs higher. If this is your first time riding this baby take at least a quarter of your profits off the table.
Update:
Just found out from my TOS and options guru Paul that ONP has hit the options market! This is huge as it opens up a lot more ways to play this one. I will be working with Paul to try and figure out how this will affect the stock and also a few play that can be made with options. at the very least I will no longer be selling my shares as I can now sell covered calls against the shares now.
Update:
Just found out from my TOS and options guru Paul that ONP has hit the options market! This is huge as it opens up a lot more ways to play this one. I will be working with Paul to try and figure out how this will affect the stock and also a few play that can be made with options. at the very least I will no longer be selling my shares as I can now sell covered calls against the shares now.
Monday, April 12, 2010
Today's AAPL Trade
I am putting my money where my mouth is and making a bearish bet on AAPL today.
The order filled today: Sold May 10 260/270 call spread for $1.65 credit.
This is a very short term bet that AAPL will remain below $260 or go lower ahead of earnings this month. There may also be a possibility to make another bearish bet in the day or two immediately before earnings when IV usually reacts favorably for option sales.
The order filled today: Sold May 10 260/270 call spread for $1.65 credit.
This is a very short term bet that AAPL will remain below $260 or go lower ahead of earnings this month. There may also be a possibility to make another bearish bet in the day or two immediately before earnings when IV usually reacts favorably for option sales.
Sunday, April 11, 2010
AAPL Ipad Sales
So I am looking at the new Ipad and how it will affect the stock of AAPL and think it will be disappointing. Apple said first day sales were 300k which is about half of what a great first day of sales would have been, based on analysts estimates of 600-700k, and on par with what they estimated to be average. Another negative comment was that 75% of the first day sales were pre-order customers so only about 75k were people buying on "impulse" and might be waiting for the 3g version like myself.
I personally was at a shopping mall that first day and stopped by the apple store. There were people playing with the demo Ipads, but no hectic line or chaos as expected on the first day of release. A few customers walked out with new Ipads, but most were just there to check it out. They also didn't have the 3g version which most likely negatively affected their sales.
Apple tried to play up the "1 million downloads" to put a positive twist on the launch, but most users know that people only pay for about half of these and mostly download all the free apps they can before actually buying any.
Verdict:
I see the Ipad adding to Apple's bottom line through the sale of devices and apps, though not as significantly as the Iphone did upon it's debut. I believe the stock to be pricing in a larger impact from the Ipad than will actually be experienced in the next quarters earnings. Dare I say that Apple will not beat earnings estimates for the first time in a while? I say it will depend on the sales of the 3g device later this month.
My recommendation: If you have a nice profit on AAPL it might be time to take some off the table at the $245-250 level.
For the record: I personally don't own any AAPL positions, but I am looking at bearish options plays and will be buying an Ipad when the 3g version hits stores.
I personally was at a shopping mall that first day and stopped by the apple store. There were people playing with the demo Ipads, but no hectic line or chaos as expected on the first day of release. A few customers walked out with new Ipads, but most were just there to check it out. They also didn't have the 3g version which most likely negatively affected their sales.
Apple tried to play up the "1 million downloads" to put a positive twist on the launch, but most users know that people only pay for about half of these and mostly download all the free apps they can before actually buying any.
Verdict:
I see the Ipad adding to Apple's bottom line through the sale of devices and apps, though not as significantly as the Iphone did upon it's debut. I believe the stock to be pricing in a larger impact from the Ipad than will actually be experienced in the next quarters earnings. Dare I say that Apple will not beat earnings estimates for the first time in a while? I say it will depend on the sales of the 3g device later this month.
My recommendation: If you have a nice profit on AAPL it might be time to take some off the table at the $245-250 level.
For the record: I personally don't own any AAPL positions, but I am looking at bearish options plays and will be buying an Ipad when the 3g version hits stores.
Monday, April 5, 2010
Who Pays to Store Cash?
So following my gold sale I was looking for a place to store the cash while I research and sell/buy options and found that not many banks are paying to hold your cash these days. Through my search I stumbled upon Ally bank who currently pay 1.29% for savings or money market accounts which is pretty good considering what is out there now.
Ally is an online only bank that you can link to your current bank and or investment accounts and use as a cash storage earning interest. Transfers seem to go through in 1-2 business days which is normal and I haven't had trouble in the week or so I have had the account. Opening the account was also pretty easy and was complete in one week. linking accounts took 2-3 business days to verify. All in all I am happy so far in my new cash storage bank.
If you are looking for a good rate CD or have one expiring soon that you want to roll over into a higher yielding one Ally also has a good deal on that. Here is how to take advantage:
Basically I would suggest you open one of their 5 year CD's at 2.99%. This CD has an early withdrawal penalty of only two months interest which is the most lenient you will find at any bank. Cash it out after one year and you will end up with close to a 2.5% yield after the penalty. If you keep it for two years even with the minuscule penalty you would earn over 2.9%, I challenge you to find a better 12 or 24 month CD rate than that!
Ally is an online only bank that you can link to your current bank and or investment accounts and use as a cash storage earning interest. Transfers seem to go through in 1-2 business days which is normal and I haven't had trouble in the week or so I have had the account. Opening the account was also pretty easy and was complete in one week. linking accounts took 2-3 business days to verify. All in all I am happy so far in my new cash storage bank.
If you are looking for a good rate CD or have one expiring soon that you want to roll over into a higher yielding one Ally also has a good deal on that. Here is how to take advantage:
Basically I would suggest you open one of their 5 year CD's at 2.99%. This CD has an early withdrawal penalty of only two months interest which is the most lenient you will find at any bank. Cash it out after one year and you will end up with close to a 2.5% yield after the penalty. If you keep it for two years even with the minuscule penalty you would earn over 2.9%, I challenge you to find a better 12 or 24 month CD rate than that!
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