Seeking Alpha

Roger C. Wren

 
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  • A Chance To Make 50% On Apple With Little Downside Risk [View article]
    Why go to the trouble of so many complications. Your 10,000 dollar max profit will be reduced by a total of five commissions in a best case of AAPL ending up over 650. You say you will be happy buying AAPL for 400. OK.

    Sell one January 2014 450.00 put for 5300 dollars. If AAPL goes below 400 dollars you get AAPL for 397 (450 - 53) and are happy. Whoopee.

    Between 400 and 450 you at least make a profit of some kind. Above 450 you make a profit of 5300 minus one commission. You can not lose. You either get AAPL at your desired price or you make a profit of some sort, quite likely 5300 dollars which is more than half of your hoped for max of 10,000 dollars and more likely to be a result.

    Your sell put and buy bull spread has a bigger potential profit but a huge donut hole from 400 to 600 where you win nothing and tie up 20,000 dollars of margin for a long time.

    All this said, I the Village Idiot think it is likely that AAPL will go over 650 in a year and a half and you will have a winner. I think that, obviously, AAPL ending up over 450 is more likely than over 650 and I would settle for a smaller but more likely payoff.

    Jul 1 03:28 AM | 9 Likes Like |Link to Comment
  • Buying Apple On A Pullback: An Option Strategy [View article]

    Sorry Reel Ken. I did not make it clear I was replying to Raj2020.
    Nov 13 09:11 AM | Likes Like |Link to Comment
  • Buying Apple On A Pullback: An Option Strategy [View article]

    Your 300 dollar put is protecting your 385 put true but it does not protect the stock and the 385 put you sold both. If the stock drops below 300 your losses will start to mount up.
    Nov 12 01:11 PM | Likes Like |Link to Comment
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