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  • Don't Trade Apple Earnings Without Reading This First [View article]
    Thank you for taking time to write comments. I appreciate it. My apologies regarding the typo error (that was original company name though). Once an article is published on SA, the author can't edit it.

    Pls don't consider typo error as a symbol of ego, I am a full time trader and if this were to show anything, in all honesty this typo just means that I have less time available.

    Yes, I was short Apple via 580/600 strangle. Here is a screenshot of my last trade that I sent to OPNewsletter subscribers-> http://bit.ly/JtQr4e, the trade was +100 to 300% winner (pls check my twitter stream-> http://bit.ly/JVkcaQ)

    Thank you again.
    Have a great weekend.
    Apr 20 10:18 PM | 3 Likes Like |Link to Comment
  • Don't Trade Apple Earnings Without Reading This First [View article]
    @Bmgue12

    Here is a simple 1:1-
    1) Call makes money when stock goes up
    2) Put makes money when stock goes down

    You are absolutely correct that one of the side will lose money. So one needs to trade with a plan-> a) when to buy, b) which strikes to buy, c) how to buy and d) how not to lose money

    Take an example of a trade for OPNewsletter subscribers (http://bit.ly/JtQr4e) - I mentioned to buy Apr 600 call options (expired yesterday) and Apr 580 put options, the cost was $1.60. You need to assume 100% loss upfront because there is only few hrs of time value..... once you are comfortable with the risk...enter/exit based on your plan....by the end of the day calls were worthless but the puts were worth almost $7, thus making ($7.00-$1.60)/$1.60 ~300+%

    of course, I don't expect to hold such positions till closing bell, so we continued to take profit....we did the same on CMG as well...

    Having said that, if stock didn't move...it would have been a 100% loss..
    Apr 21 02:49 AM | 2 Likes Like |Link to Comment
  • Don't Trade Apple Earnings Without Reading This First [View article]
    Thank you...remurraymd

    yes ..CSP is an excellent strategy...especially when one wants to get long but at a discounted price...I am glad it's been working for you...

    For those who do not understand "Cash Secured Put" (CSP) strategy...here is 1 2 3-

    1) you decide at what price you would like to buy AAPL shares, 2) allocate equivalent capital,
    3) Instead of buying shares you sell puts of that strike...you get shares at Cost Price= Strike price - Premium received....buying it even cheaper than your desired price

    This assumes you are willing to buy shares at that price and ready to take risk of holding position till expiration of that strike. My friend Bill just authored a good piece on this - http://seekingalpha.co...
    Apr 21 02:29 AM | 2 Likes Like |Link to Comment
  • Don't Trade Apple Earnings Without Reading This First [View article]
    Thank you Kim. I sincerely appreciate your kind words.
    Apr 21 02:14 AM | 2 Likes Like |Link to Comment
  • Don't Trade Apple Earnings Without Reading This First [View article]
    Actually, as you might know by now China pretty much saved AAPL...as per Tim...demand was "mind-boggling" in China, where revenue for the quarter was a record-high $7.9 billion...
    but I get your point, thank you for sharing.

    Regarding RIMM, well yeah, I do remember. In fact, I extended similar analogy for $GMCR as well http://bit.ly/IlBiPJ when it was pretty much sitting at the top.
    Apr 25 02:21 PM | 1 Like Like |Link to Comment
  • Don't Trade Apple Earnings Without Reading This First [View article]
    please see attached, this is what I sent to OPNewsletter subscribers -> http://bit.ly/JtQr4e

    This was done via a strangle strategy, which means I am LONG as well as SHORT at the same time. SA authors need to choose either a) Short or b) Long. There is no 3rd option i.e. Delta neutral, I chose SHORT because I was bearishly biased at the time of writing this article.

    Directionally, I trade mostly for the day and then I am out. I can be both bullish and bearish at the same time via my delta neutral approach.

    So After Friday close what position do I hold? Delta Neutral with minor bullish bias. I am not waiting for Tuesday. I am neither short nor long but I am in the trade, for now.
    Apr 20 11:00 PM | 1 Like Like |Link to Comment
  • How You Can Trade The Apple World Wide Developers Conference Next Week [View article]
    wow dpk...that's quite a comment for a weekend. Your arguments pretty much explains how much efforts you might be putting in researching a trade before investing your money (but I may be wrong as you might be an astute investor but there is no way for me to conclude that yet).

    I am sure it took you sometime to write this long comment over the weeekend. These days even a 10year old kid know (at the least the world I live in) how to find information about someone via google (no sarcasm here). I wish you had spent some time doing that, you would have found information on all the points you mentioned above...

    Strange as it maybe, you claim to be an OPN subscriber and show so much concern about "name" but never cared/asked me before joining/or during the subscription????? humm....else you would have known almost everything about me (I have even shared with OPN members...time to time...when I lost my mom, when my father suffered a stroke, when I had my first child, 2nd child, where do i live, how much I am educated...etc etc?) and I answer question myself (not a robot/computer generated answer ). If you were a member, as you claim to be, where were you then my friend?

    You mention there is no information about the OPN Fee. Quite an observation!! then how did you find out what was the fee when you became subscriber as you claim to me? did you sign-up without knowing? How? Paypal will ask you before joining...did you sign-up without even looking at it? without considering it was worth or not? BTW, all the information about OPNewsletter is listed here-> http://bit.ly/MmHVW8, did you ever care to read that before signing-up?

    Travis is a brilliant guy and I have lot of respect for him (I assume you are referring to Travis of Stock gumshoe). Do you know I have him in OP's "Best of web collection"....for past several years. Did you ever noticed that? or did you ever read the post when I introduced him to OP readers as well?

    Fish/Pond etc/Links etc- that's quite a conclusion I must say.
    First, do you think I should create seeking alpha article for free and let only SA/SA shareholders makes money? or give away my knowledge for free to someone who is going to use it commercially? I do a lot of voluntary work, charity and still continue regularly (I call it improving lives) and encourage others -> http://bit.ly/LT0ijy; where were you at that time?

    And you mentioned that you learned from SA so much, I think then it's time to give back..why not please think of writing and contributing to SA so others including me can learn from you as well.

    Whether Kim was a beginner or not 3 years ago, he was a real subscriber as he has kindly, openly shared that. He knows me, very well. We are even connected on FB and he still continues to be a member of OPNewsletter (I have joined him as well to support). More on that sometime later.

    What you call "tricks" I call it "bread and butter". Simplicity is beautiful. Unfortunately it is not sexy, not glamorous and therefore many traders continue to search for holy grail, which doesn't exist...and guess what..to many simplicity is boring....I want money making to be as boring as possible because there is a life waiting, beyond trading, that needs to be enjoyed (by self and with others). However for whatever reasons, I have not yet reached at that boring enough point. Maybe you could guide me how to? and I will be willing to pay.

    Anyways, my best and sincere wishes. Please open up your heart and mind and you will find that there is a beautiful world out there (and it is simple). There is so much to learn. It is already difficult to make money consistently in these markets, it is even more difficult to help others make money with consistency.

    Have fun and no need to reply to my comments, pls use that time for enhancing knowledge further or spend that quality time with others surrounding you.
    Jun 11 12:49 AM | Likes Like |Link to Comment
  • How You Can Trade The Apple World Wide Developers Conference Next Week [View article]
    Dear dpk,

    1- First pls don't disrespect yourself by calling yourself idiot (because either you have never been OPN subscriber of if you did, then you signed-up for the wait list). I respect every individual including you; and I have very high regard for the customers I serve.

    2- what point are you raising? why is there a waiting list or why there is no waiting list? or why is there a wait listing for a limited time?

    3) You claim to know OP Income Newsletter more than others. I don't know if you know that for almost 3 years which included a mad bull/fierce bear market, OPN was a No profit, no fee newsletter for every single month!! (that's not 1 month trial...that's every month of almost 36 months...no profit, no fee)....you never said (during the period you mention you know OPN) why is every month free if you don't make money? no suspicion then??

    4th, let's grow-up a little; Is waiting list a measurement of transparency? If yes, I don't think there is any need to discuss even further.

    And please do yourself a favor, I am sure you are very good at it but still.... start thinking and analyzing a bit more....was this post about selling OPNewsletter? In-stead of enriching the conversation by sharing your perspective on why does this happen (pre and post WWDC) or correcting me so I could also learn, you are making it unproductive. You are depriving us of your trading/analytical intelligence from which we all could potentially benefit.

    Have a good and thoughtful weekend
    Jun 8 04:57 PM | Likes Like |Link to Comment
  • How You Can Trade The Apple World Wide Developers Conference Next Week [View article]
    Dear dpk...Thank you for taking time and writing comment.

    My friend, did you really click at the link..if you did you would know that it doesn't require one to sign-up..

    - Here is 2010 -> http://bit.ly/NmP22L (it has screenshot of all the trades)
    - Here is 2011 post before it all began -> http://bit.ly/NmP22P

    And I didn't say good, better or best trades/results. The post is to present an idea and the link provides result of those ideas...good or bad...

    It takes guts to post trades beforehand and then post results/screenshot with actual fills, especially on twitter or SA...since you follow my updates...you know very well what I do and how I trade....

    Name- > google can surely help in finding who OptionPundit is...but I think it can't help me find who "dpk" is......how about adding a bit more information in your profile on SA before questioning others.....oh common my friend, be fair...at least I am more transparent and less secretive than dpk :)

    lastly...with due to respect to your feelings/comment, I hope you make money from the idea..and do let me know how you r trading this (maybe in advance with screenshots) so I could try my best to guide in case it turns out to be wrong...
    Jun 8 12:40 PM | Likes Like |Link to Comment
  • Trading Monster Beverage's Boom And Bust, All In A Day [View article]
    @John, I will prefer to be out before earning announcement tomorrow. But if I were still looking to stay long-> I will hedge it in way that my downside is protected while still participating in the rally.

    Valuation depends on the inputs-
    MNST has been growing at 9 yr FCF CAGR of 74%, 5yr CAGR at 33%, 3yr CAGR at 17% (for KO those are 6%, 7.6% and 5.4% respectively). So if you assume 15% CAGR going forward and after 5-7 years slowing down to 7-8%, roughly $70-$75 valuation might be a good one. Someone can always spin valuation with higher growth rate but at almost 37x FCF, I don't think MNST is really cheap. But that's just me.
    May 8 11:52 AM | Likes Like |Link to Comment
  • Protect Yourself Before Apple Falls Further [View article]
    An additional point -

    - The cash yield @ $110/share. You may know the breakdown of cash as per latest AAPL 10-Q [Latest balance sheet from Apple (http://1.usa.gov/KBJzFk), Page 3] is : $10.12billions cash, short term investment is $18.42 billions and Long term investment is $81.64 billions. Actually page 7 of the report gives a clear break-up of each "cash or investment component" and policies in fine-prints also gives an idea.

    I am assuming that as a value investor, you have already examined all the the securities where AAPL has invested. Could you pls share how quickly are those funds available (in comparison to cash) or the quality of those investments and who graded them and at what level? Maybe you could share what those $5.5billion Mortgage and asset-backed securities are?

    I am NOT saying that anything in that is bad or as per accounting they can't define it as cash or equivalent. I also don't doubt their management's abilities to invest in top quality investments.

    It depends on how you interpret data. 2007/08 credit has taught time and again, at least to me, to treat "cash" and "investments" differently. But that's me :) and I am open to learn continuously.
    May 8 01:39 AM | Likes Like |Link to Comment
  • Protect Yourself Before Apple Falls Further [View article]
    m1cha31, nice one :)

    You know I used that to refer to institutional/big investors. Smart ones get in and get out without much fanfare.
    May 8 12:31 AM | Likes Like |Link to Comment
  • Protect Yourself Before Apple Falls Further [View article]
    Dear remurraymd, Thank you for the comment. Assuming you have read the article, you might know that none of the scenario above is suggesting to sell shares. Nor, I am short (at the time of writing article).

    So you agree that AAPL takes a rest like this every 6month (neither I agree nor disagree). Let me assume that you are willing to take every resting opportunity to add more shares as those are more "undervalued", wouldn't it be nicer to make more money during this process? I am assuming that you are an excellent value investor who had patience and discipline to hold AAPL from $10 to $644 throughout past bear/bull cycles when stock markets almost halved and had this insight that AAPL pauses/pullsback every six month, don't you think it would have been nicer to allow puts to partially fund your subsequent purchases at lower prices?
    May 8 12:25 AM | Likes Like |Link to Comment
  • Protect Yourself Before Apple Falls Further [View article]
    WDIK, thank you for the comment. It will make money because none of the scenario above is suggesting to sell shares (Base strategy). Thus gains will be= Apple price - Put value.
    May 8 12:09 AM | Likes Like |Link to Comment
  • Lessons From Earnings Plays [View article]
    Firstly, thank you for sharing these stats Kim. Well done.

    Just a general comment for the readers and option traders out there.

    Playing earnings is always lucrative and will always be so, for one simple reason. "Potential" to make big in the shortest possible time. It is this desire and a few past successes which makes for a perfect "hindsight bias". This "hindsight bias" is what traders infer for future trades to be successful. When it is mixed with inappropriate capital allocation, it is a perfect recipe for disaster.

    It is true that phenomenal results can be achieved during this time. But there is no free lunch. Every trade has its unique risk and reward profile. What Kim is doing with RICs and Straddles/strangles is that he is limiting any big losses while still opportunistically generating realistic returns.

    @jjonnerwman
    You are absolutely right. Playing earnings is not for everyone. While one needs to be in total control of Greeks (Delta, gamma, theta and vega), you also need to factor in whisper numbers, pre-earning stock moves, who are the big boys holding shares, possible squeeze, recent news and analyst coverage (and their upgrades/downgrades before announcement), product introduction cycles (especially for manufactures), timing of earning announcement (yes!) in addition to fundamentals of the company...and guess what? in spite of all this hard work, your chances of being correct are still 50/50..Because what you did was to analyze past. You also need to review future beforehand- whether or not, they will raise or lower the guidance. And for companies like AAPL, margins....so you see, it's not for everyone and certainly one needs to be strategic about "where to play" and "how to play".

    Don't ignore this "event" just because there is too much uncertainty but instead develop your craft, seek guidance and success will be yours. What Kim is doing is that by choosing RICs/Straddles/strangles, he is eliminating the uncertainty and this is surely one of the good ways to play earnings.

    Profitable Trading, OP
    May 6 11:28 AM | Likes Like |Link to Comment
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