Wednesday, November 11, 2015

AAPL Update #42 (Stock Purchase)

Nov 10

Analysis

AAPL dropped 3.41pts today, dropping sharply on the open. This was a large gapping drop from the 121 area. The drop was strong enough that both the short call and long put hedges could be closed out for a profit and more stock bought.

The 121 gap area appears to be a supply area area will need to be tested a few times before resuming the uptrend.

I plan to roll down the hedges from 125-117 to 121-112 and collect premium to purchase stock.

AAPL closed at 116.77

Trades

Part 1 - Roll down the calls
+7c Nov 20' 125 Call @ 0.15
-7c Nov 20' 121 Call @ 0.68
Net credit: 0.53

Part 2 - Roll down the puts
-7c Nov 20' 117 Put @ 1.84
+7c Nov 20' 112 Put @ 0.62
Net credit: 1.22

Total credit: 1.75/c (Total cash $1225)

Part 3 - Purchase stock
+10shrs AAPL @ 117.48

Total stock in the account is now 721 shares

-End