Monday, November 30, 2015

AAPL Update #48

Nov 30

Analysis

The season from the start of US Thanksgiving into the end of Dec is usually a bullish time in the market. There is a tendency for the market to rally higher into year end. Usually, but not always.

The rallies can also be short lived and retracements are frequent. As we are not try to predict the market movement, we want to remain hedged, but also realize that we can look to be proactive at times.

AAPL is looks to be in a bullish move consolidating after a its move higher. I am anticipating a further move upwards and I am therefore looking to roll up the short call strikes up and out in time. I will still be keeping a put hedge in place.

I have placed an order to move the short call up one strike and out one week in time.  With AAPL bouncing around the 118-119 strike I will be entering this trade for a slight debit, whereas I have usually been looking to roll and build a slight credit.

Moving up the strike by 1.00pts for the cost of 0.03pts is the cost for this diagonal spread. As I don't have any cash in the account to cover this debit, I will have to add a slight amount, about 50 dollars to cover this trade. This is not a big deal.

Trade

 +7c AAPL Dec 11' 118 Call @ 2.28
 -7c AAPL Dec 18' 119 Call @ 2.25
Net Debit 0.03/c

[Edit - this trade was filled around mid-day after AAPL started to retrace. However, the broker filled the trade with a Dec 11' 119 Call.  This is a mistake on the broker part with the net result being favorable to the account. The 119 Call closed at 1.36 after being sold for 2.25. I have moved the strike up by 1pt but without an extra week in time value. The broker has essentially given me a 739 move for a cost of 0.03. I will be investigating with the broker. - the error has been corrected and shows Dec 11' 119 Call]