Wednesday, January 20, 2016

AAPL 2016 Update #65 (Stock Purchase)

The price of AAPL shares started to break down a little more today hitting a low of 93.42. Interesting, the shares finished slightly up on the day closing at 96.79.

There is tremendous indecision at this point at the where price will go is ultimately anyone's guess. It is getting closer to breaking the April lows and perhaps lower. Sentiment however, is getting closer to a wash out as many are starting to give up on the name. A further strong move down is probably going to cause many to exit all positions as they would down -30% from the 2015 highs.

Earnings is a few days away and it most likely looks as if most of the news is already discounted into the price.

I am at this point more concerned about confining risk. To do so, I have decided that rolling down the short calls a little more (tighten the collar) and capturing more shares is prudent. I don't believe there will be a price run up into earnings now (too weak) -- what happens after ER is a complete unknown, either wild price action (ala NFLX) or nothing at all.

If price goes much high after ER, there is still plenty of supply overhead and I can roll out a little further in time to compensate.


Part 1 - Roll down calls
+8c Jan 29' 103 Calls @ 0.84
-8c Jan 29' 99 Calls @ 1.75
Net Credit 0.91/c

Purchase stock
+7 shrs AAPL @ 94.16

Total number of shares is 824

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