Thursday, October 29, 2015

AAPL Update #39 (Stock Carried Away)

Oct 30

Analysis

Expiration Friday! Weekly options expire today and AAPL earnings came out earlier this week. The stock did not move at all after the earnings release. Earnings were positive and AAPL beat expectations and guided to a profit for the holiday quarter.

As the week went, AAPL caught a bid and began to solidly move higher and closed at 120.54 the day before expiration.

At this point the position will realize its full value of 7460 profit if the stock is called away at 116. Rolling the short call up, which is now deep in the money, and out in time is now very difficult without going far in time. I want to do the roll for even money or a slight credit.

Unless the stock drops on Friday, I am going to let the position get called away.

My reasoning for this is two fold. AAPL I believe will continue to run into the holiday session. It may have at least 10+pts or more to the upside. 

To reset the collar I need to give up a 4pts of profit, sell out 700 shares and purchase an amount back reflecting the 4pt difference, about $2800

The position will close itself out automatically at the close of trading this Friday.

I will repurchase the stock position on Monday morning with a new collar.

Trades

+7c Oct 30' 116 Call @ 0.00
-7c oct 30' 104 Put @ 0.00
-700shrs AAPL @ 116 = 81,200

Remaining +34shrs AAPL

-End