Apple: Tim Cook Failed, But Learned From It [View article]
For the time being, they are likely to sell every mini they can make for $329 and up. Believe it or not, many people will find this very same product more appealing priced at $329 than at $299. (If you don't understand that, perhaps I could introduce you to my wife.) After an upgrade, then they'll sell the old minis for $279 or something, when they can crank them out for less.
Apple's Cash Position Is Overstated By $70 Billion [View article]
Impressive research. Thanks for the article. I agree that over the long haul, Apple could have trouble keeping up with new technology that Samsung might develop. Or suppliers might lack the capital to expand enough to keep up with the sales growth that is needed to meet Aapl stock price targets in the future. But when? Your article lacks any reason to believe that sales will be hurt enough over the next few quarters to derail growth.
Your article makes some reasonable points (which can be argued, of course.) Most comments are emotional, religious eruptions, which you should ignore. Unfortunately, you have repeatedly stooped to the level of your attackers by name-calling ("bagholders"), which lends credence to their attacks upon your objectivity.
Why Apple's Buyback And Dividend Plan Is A Disappointing Drop In The Bucket [View article]
Well, two things. First, the tax issue so many have mentioned. Second, the dividend can be raised going forward. I'm pretty sure that Cook and co. understand that a company needs for its dividend to be stable or increasing going forward. So this should signal confidence for the long term re. earnings. I don't see how this can be disappointing.
You might want to point out that the fourth alternative, selling a put, is identical to writing a covered call using the same strike and expiration, in so far as risk, potential gains, and required margin. For people unfamiliar with selling options, the covered call (ie, selling calls equal to the number of shares owned) is easy to visualize, and it's also allowed in level I accounts, such as IRAs.
Apple Options All 'Skewed Up': Watch Out For High Call Premiums [View article]
Well, when will the first dividend be paid? Second, wouldn't a dividend prior to expiration add to the put's premium relative to the call's? Yet the put IV seems to have just plummeted relative to the call IV.
Well, the parabolic move is partly the stock catching up to the performance of the company. Of course it's also fund managers' panic buying and program traders piling in and pushing. But sentiment has changed dramatically for the market as a whole, too. Might a forward p/e of 13-15 be the new normal, especially for dividend payers, instead of 8-10?
But hedge fund managers and 15-yr-olds who own just one share are all staring at the same parabolic chart, so it won't run past 800 by June. I don't even think it will get too far ahead of the median analyst price target, which right now is ~610, the highest being 730. I expect a trading range, with extremes of perhaps 520 and 620, for weeks to months. Unless we get some negative news or a general market sell-off though, AAPL should find strong support on dips, I think.
How To Trade Apple With Weekly Options [View article]
The concept of risk management? No one, I dare to speculate, would ignore the risk with this sort of bet. By "risk management" do you mean, you watch it like a hawk and bail before it's too late?
This reminds me of long ago when people would sell the "teenies", far-OTM options worth a nickle on the day of expiration. If they ever lost, they'd get creamed, but what were the odds of that? Well, eventually a stock jumped by 20% after hours and a player was bankrupted.
It isn't easy placing hedged bets with any high degree of success. I had not thought of using a condor to hedge a spread. Kudos for making it work. I would have just bailed on the spread at a loss.
At first I was a bit puzzled as to the use of weekly RICs. But had you set up a RIC with the same expiration as the bear spread and the stock stayed flat all the way to expiration, the loss on the RIC would have been greater than the gain on the spread. Not clear to me that it would have been any better with the weeklies, though, had the stock gone mostly sideways.
To set up the iron condor now, starting with the 605-600 bear call spread, looks attractive. Of course, so did the 525-500, at the time. In a little over a week, Aapl could release sales numbers for the first week of new iPad. Yes, a bear call spread "should" be a good bet right now, but... I'm wondering if tight weekly RICs could be the best bet right now. I, too, expect AAPL to trade in a range over the next few weeks, but a few percentage points up and down might be enough for the weekly RICs.
I appreciate your articles. Thanks for posting. I don't quite get why some people who don't appreciate, or say they don't learn anything, from an article need to waste their own time and everyone else's by posting grumpiness.
It isn't easy placing hedged bets with any high degree of success. I had not thought of using a condor to hedge a spread. The RICs paid off against the loss of the bear spread in this case because Aapl moved quite a bit, and it didn't reach profitability until the fourth RIC, due to the big loss on the bear spread (why i don't like spreads.) Well, kudos for making it work. I would have just bailed on the spread at a loss.
At first I was a bit puzzled as to the use of weekly RICs. But had you set up a RIC with the same expiration as the bear spread and the stock stayed flat all the way to expiration, the loss on the RIC would have been greater than the gain on the spread. Not clear to me that it would have been any better with the weeklies, though, had the stock gone mostly sideways.
I do like the idea of an iron condor about now.
I appreciate your articles. Thanks for posting. I don't quite get why some people who don't appreciate, or say they don't learn anything, from an article need to waste their own time and everyone else's by posting grumpiness.
Apple Has Already Won The Tablet Market [View article]
Best article on Apple in a long time. Excellent analysis with insight into technical aspects that was also written well (ie, comprehensibly) -- a combination that is seldom seen. Thank you!
Selling Apple Calls? Think About Selling Stock Instead [View article]
Yes, so as usual, to make money something has to be mis-priced. In this case IV has to be low and options cheap, yet the trader believes a large move is likely (and could go in the wrong direction.) When that's not apparently the case, as with AAPL right now, the covered call would look like the better bet to me.
Also, thanks for a great article, one of the best that i've read in a while. I'll add this strategy to my quiver. By the way, what software did you use to sketch your curves and calculate your position values (presumably using Black-Scholes)?
The Non-Decline And Fall Of Apple [View article]
Apple: Tim Cook Failed, But Learned From It [View article]
Apple's Cash Position Is Overstated By $70 Billion [View article]
Apple's Pricing Power? Questionable [View article]
Analyst Revisions For Apple: Growth And More Growth [View article]
Oh, woe to Apple shareholders!
Why Apple's Buyback And Dividend Plan Is A Disappointing Drop In The Bucket [View article]
Apple Options All 'Skewed Up': Watch Out For High Call Premiums [View article]
How To Play A Legit Apple Pullback [View article]
Apple Options All 'Skewed Up': Watch Out For High Call Premiums [View article]
An Apple Bubble Is Forming [View article]
But hedge fund managers and 15-yr-olds who own just one share are all staring at the same parabolic chart, so it won't run past 800 by June. I don't even think it will get too far ahead of the median analyst price target, which right now is ~610, the highest being 730. I expect a trading range, with extremes of perhaps 520 and 620, for weeks to months. Unless we get some negative news or a general market sell-off though, AAPL should find strong support on dips, I think.
How To Trade Apple With Weekly Options [View article]
This reminds me of long ago when people would sell the "teenies", far-OTM options worth a nickle on the day of expiration. If they ever lost, they'd get creamed, but what were the odds of that? Well, eventually a stock jumped by 20% after hours and a player was bankrupted.
How I Played Apple's 'Pullback' [View article]
At first I was a bit puzzled as to the use of weekly RICs. But had you set up a RIC with the same expiration as the bear spread and the stock stayed flat all the way to expiration, the loss on the RIC would have been greater than the gain on the spread. Not clear to me that it would have been any better with the weeklies, though, had the stock gone mostly sideways.
To set up the iron condor now, starting with the 605-600 bear call spread, looks attractive. Of course, so did the 525-500, at the time. In a little over a week, Aapl could release sales numbers for the first week of new iPad. Yes, a bear call spread "should" be a good bet right now, but... I'm wondering if tight weekly RICs could be the best bet right now. I, too, expect AAPL to trade in a range over the next few weeks, but a few percentage points up and down might be enough for the weekly RICs.
I appreciate your articles. Thanks for posting. I don't quite get why some people who don't appreciate, or say they don't learn anything, from an article need to waste their own time and everyone else's by posting grumpiness.
How I Played Apple's 'Pullback' [View article]
At first I was a bit puzzled as to the use of weekly RICs. But had you set up a RIC with the same expiration as the bear spread and the stock stayed flat all the way to expiration, the loss on the RIC would have been greater than the gain on the spread. Not clear to me that it would have been any better with the weeklies, though, had the stock gone mostly sideways.
I do like the idea of an iron condor about now.
I appreciate your articles. Thanks for posting. I don't quite get why some people who don't appreciate, or say they don't learn anything, from an article need to waste their own time and everyone else's by posting grumpiness.
Apple Has Already Won The Tablet Market [View article]
Selling Apple Calls? Think About Selling Stock Instead [View article]
Also, thanks for a great article, one of the best that i've read in a while. I'll add this strategy to my quiver. By the way, what software did you use to sketch your curves and calculate your position values (presumably using Black-Scholes)?