Saturday, June 20, 2015

AAPL Update #11

Jun 19

Analysis

AAPL closed at 126.60. It had a weak performance during the market rally days this week and today closed at its lows, down -1.28

Overall, AAPL is now appears to be in downward trend.

However, with one week to go, the hedge point is at 124, still 2.60 away. Unless it drops faster, the hedges are looking to expire worthless for this cycle.

The puts are trading for 0.38 and the calls for 0.49

The stock is around the same level as Jun 9 when these hedges were set. Each hedge has lost about $1 offsetting each contract.

I will hold and watch this position into expiration week. Practically, I need the stock to move down close to 3.00 to recover nearly full credit on the put and close the short call. This may be possible on an intraday basis.

Earnings is Jul 28 so expect IVR to increase.

Trades

No trades -- yet, if the price breaks 125.62 a new recent low will be established and price will probably fall further toward the 118-120 range in the coming month or two. I will be looking for opportunity should this happen.

Position Value

Assuming the hedges expire worthless at or near current price:

+654 shares @ 126.60 = 82 796

It is interesting to note that our breakeven price for the stock is now at 119.41 when compared to the opening position on Feb 26.

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