Tuesday, May 26, 2015

AAPL Update #7

May 26/27

Analysis

AAPL closed down today at 129.64, more than two dollars off of Friday's close.
The overall market dropped and volatility increased. The Jun 5 AAPL 127 Puts closed today at 0.84, more than doubling since Friday.

There is a week and half to expiration. With today's move down there are some things to consider:

(1) Puts have doubled in value, I could look at closing out the put position and adjusting the put hedge downward.

(2) Wait to see if the stock continues to drop further and look to close both the long put and short call position -- this is ideal.

(3) Look at rolling the short call up and out to extend duration.

(May 27) Stock is higher, opening up 1.06 trading at 130.69. Unless we see a sell off in the next few days increasing the value of the hedges, I will continue to watch. Time value in the puts will evaporate, but as the hedge only cost 0.35, I would like to see it them trade for over 1.00 before closing/rolling.

-End

No comments :