Wednesday, July 08, 2015

AAPL Update #16 - (Stock Purchase)

Jul 8

Analysis

The overall market is dropping this morning. AAPL dropped out the gate this morning. Not wanting to miss this drop, I sold the hedge and purchased more stock in the low 124 area. AAPL is however, continuing to look weak this morning and may continue lower. (Edit: NYSE has an extended trading halt, more volatility may be coming)

In the past, I have sold out the puts near the bottom of the move, but today this may be the continuation of a bigger multi-day move down.

I believe that there is demand in the price range of 118-119 according the chart, and eventually these snap back intra-day rallies will eventually fail. The area where the stock will continue to drop and find buyers is into that range.

With that range in mind, I am able to roll the collar down 2 strikes in the same expiration period and reset it at the 120-127 strike. I put the collar on for a slight net credit.

I have made two rolls in the past two days, capturing 8 shares of stock. To make the next roll more efficient I will wait to see if the price gets down into the 118-120 area on a big, high volatility move down prior to expiration.

Trades

Closing Trades
-6/c Jul 24' 122 Put @ 2.32  (currently this is trading for 3.10 at the close)
+6/c Jul 24' 129 Call @ 1.39

Purchase Stock
+5 shrs AAPL @ 123.98

Opening
-6/c Jul 24' 127 Call @ 1.98
+6/c Jul 24' 120 Put @ 1.96
Net credit 0.02/c


AAPL looks to be increasing its sell off, looking for a move down to 119 in the next few days or a move back up toward 127.

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