Monday, November 16, 2015

AAPL Update #46 (Stock Purchase)

Nov 17

Analysis
I am expecting the stock to rally or be stable. With only 4d to expiration and the short calls 2pts away now, I want to move the strikes up by at least a 1pt.

The roll can be done for a credit of about 0.22/c.  With that credit I will look to place an order to buy puts and more stock from the cash from yesterdays sale of the 110 puts.

I can purchase somewhere between 8 or 9 shares of additional stock.

According the to expected move (EM) for 11d, at current volatility (25%) the stock has a range between 119 and 108. With the hedges in place, I should have a about a 35 delta hedge.

Trade

Part 1 - Roll out calls
+7c AAPL Nov 20' 116 Call @ 0.45
-7c AAPL Nov 27' 117 Call @ 0.67
Net Credit 0.22/c

Part 2 - Purchase Puts
+7c AAPL Nov 27' 106 Put @ 0.32


Part 3 - Purchase Stock
+6shrs AAPL @ 113.78