Thursday, January 07, 2016

AAPL 2016 Update #60 (Purchase Stock)

AAPL further declined today. The stock is racheting downward and seems well on its way to hit the first demand zone of 92. This area has already been tested once in Aug 2015 and there is fresh weekly demand zone below it around 84. This stock probably has another 10pts down before any significant bounce.

I currently have on a -100 delta hedge (a conversion) and have been walking it downward as AAPL continues to decline.

AAPL closed today at 96.45, down just over 4%.


+7c Jan 15' 103 Call @ 0.50
-7c Jan 15' 100 Call @ 1.36

-7c Jan 15' 103 Put @ 5.05
+7 Jan 15' 100 Put @ 2.94
Net credit 2.97/c

Note: This is a 100-103 box that is sold. A long box is a long call spread (100-103) and short put spread (100-103). The maximum the box can be sold for is the width of strikes.

Purchase stock
+23shrs AAPL @ 98.00

This stock purchase pushes the total share count to 808. This requires a new call and put contract in order to hedge.

Normally, I would have closed all the hedges and put a new zero cost collar on after purchasing stock. Because the stock is acting weak, I am going to maintain the hedge. Adding an additional short call and long put at the same strike price will require a small debit. This is one I am willing to pay to keep on the insurance in this position.

Adding to position

-1c Jan 15' 100 Call @ 1.25
+1c Jan 15' 100 Put @ 3.18
Net Debit 1.93

This adds $193 to initial debit. This is first time I have added money into this trade since starting it. 

The opening debit is now 78252 + 193 = 78 445.  I will adjust this total in the case summary.

No comments :