AAPLE

Will it cross 700 by next week? Only time will tell! My strategy for a stress free sleep while I put money to work is outlined next.

Right before the closing bells of Friday, I bought 1 Covered Calls 690 Strike Price Sept Expiry. So I booked roughly 900$is in premium.

I am assuming my commission is low or almost nil. Honestly, the commission is not low or nil. I am doing a rough calculation just for simplicity purpose. I am also assuming that I want to keep $300ish (or $3/call) of premium no matter what. This is my income for using my head.

1. I will exit when the price of stock goes below $685.

Let's assume that the stock goes below 685. The call options should lose in premium and considering that theta is a friend in my case it will lose heavy. As I have sold calls, I will be making a profit from the calls I sold as time goes by && price goes down && stays above 685.

Consider closing price of apple to be 691 (for simplicity reasons), (691-685 = 6$) $6 is what I am willing to chew before I sell my covered calls. What happens at $685 is very interesting.

At $685, I would have lost $600 from 100 shares I have. At the same time, the price of calls should come down substantially to provide me more than $600 in profit from there. So those two will provide me a total of $0 in profit. I am assuming $3 my own charge for my work and any additional risks I am not seeing at the moment.

2. If the share price goes above 700, then the covered call will be called. I have already gained the premiums by selling 1 call. So I end up with 900ish of profit by just holding the stocks almost until expiry which is at 21st Sept 2012 or less than 10 days from now almost.

3. If the price is below 700 but above 685, then it is a matter of calculation as to what will be my profit. Nevertheless there will be a profit.

iff ( Price_aaple <= 685){

· Put a stop loss of 0.2+marketPrice to the calls;

· Sell the 100 shares making it a pure naked calls;

}

I am no immune to buying high risky options of AAPL. However after buying some really risky 700 September options when it just touched 680, I had to wait for almost 2 weeks for it to retrace most of the loss. I was able to close those positions with a loss I felt I am comfortable closing. I would have loved to close at breakeven and better yet at profit. However, I close it anyway seeing that the amount of loss has come down to level I can chew, feel bad and move on.

But I was right thinking that this monster will rise. And did we have a rise that many have not seen in a very long time. I do not want to stay outside the market and feel bad. So I employed this following strategy with two assumptions

I will sleep at night after checking the opening of the market for 30min-1 min.

I will try to get up early to see the close.

My main idea is not to check every tick and not worry about losing my money.

I am bullish on aapl and I also have 10 vertical calls strike 695/725 November Expiry. In other words, I expect the price to rise way above 725 before that. But considering the rise it had in last three days, I do not think I am stupid to be a bit cautious in very near terms.

Disclosure: I am long [[AAPL]].

Additional disclosure: I have 1 covered calls 690 strike price expiring in a week. I also have 10 vertical calls 695/725 strike price expiring on November.

Let us deep dipper at the following chart. One can easily see that the price nicely bounced between trend lines. To tell you truth for a few moments I was a bit scared when I saw it broke the upper trend line. But I was happy to see it bounce back. As we can see that within next week, a large price increase is expected. The only issue is we have one less day to trade. I have 25 Call options AAPL Sept strike 700 (monthly). I may be entered the price a bit too early this time at 9ish price. However I am certain that it will increase. I expect the price to go above 705 and can touch 720. If it touches 720, then I will have about 11$ before expiration per options aka 27500. Considering volatility to increase and considering that Ben has given a A OK for printing money, there is no reason to assume that the price will decrease from here.

Also remember that AAPL just won against SAMSUNG. Also recently AAPl has gone all the way against all the good products from SAMSUNG even the S3. Also remember the new iPhone, iPAD, iPOD, iTV. It should be insane price increase for AAPL coming up!

(click to enlarge)

Disclosure: I am long [[AAPL]].

As one can see that the EURUSD has nice respect for the trendlines. The "no love area" is the place where it is hard to trade. WHen it breaks either the region outside that, it will be either a big bullish or big bearish region or more than 1000pips. And I will be there to get it hopefully.

(click to enlarge)

Following is a chart I have drawn using my broker. One can easily see that the price is extremely bearish. When I say extremely I do not mean it will drop rapidly. I am saying that the price will gradually flow down that is better than highly volatile currencies.

(click to enlarge)

The trendlines are nicely getting respected. I have a bearish position on this. The 1.0295 is the 61.8% on recent price changes. 1.01915 is the price I expect AUDUSD to reach by 1pm Tuesday coming. Unless there is any news or moving factors appearing before that time, it is almost certain. Slow and steady wins the race when it comes to Forex.

I can keep on giving more reasons why NFLX is crap and possibly will go down from here. I have been bearish on this stock for some time now. However, one must also look at the price action and the technicals too. Because it just is not possible to know for sure when a stock will do exactly what you expect it to do. You may wait forever and then the move will happen. And the wait can be just painfully boring.

Rather than talking more, let me give you what I see on this stock technically speaking. On the day chart, we see that the stock has been inside a nice downward trend line for some time. The trend line basically started from 130 and has been doing fine until last day (Friday). Just on that day, it broke the trend line. However, it did not break the trend line convincingly. It broke with a red bar on the chart. So I am not convinced that this break of the trend line will be a permanent break towards upward movement. I am expecting the price to come back inside the trend line within next few days. I will wait for it to happen though.

I did sell my put on Thursday when I saw it was trying to break out. I will possibly get in with put options when the price goes back inside the trendines. I do expect the price to come towards 87.05USD by 16/04.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in [[NFLX]] over the next 72 hours.

Recently, in Apple corporate website a very interesting news item came up. The fact that it is regarded as one of the most respected companies in the world was promptly highlighted on its front-page. Bank of America recently made a very positive deal with Warren Buffet which helped it raise extra amount of much needed cash. However, Netflix has a habit of taking away from its shareholders and customers.

By bungled price hike, Netflix alienated its customer base. By embarrassing Qwister flip-flops, it provided a message to its shareholder that it really does not know what to do next. Trial and error should be left for boardroom discussions and internal materials. Such big steps should only be taken with clear understandings and logic. CEO of Netflix seems to have lost the basic touch of being a CEO. Netflix now makes a decision and waits to see how market will react. If it reacts badly, CEO changes its mind. Do shareholders of Netflix want a CEO like that? I doubt it boldly. And, what about the user experience it provides to its customer. Instead of providing a better customer experience, it is more than taking one after other missteps.

Recently Reuters provided news that Netflix is in talks to go into partnership with cable companies.

Reuters reported yesterday that Hastings was looking to bundle his service with pay-TV operators, and to deliver movies and TV shows through cable providers' set-top boxes. But people familiar with his thinking tell me the Apple TV model is a more plausible tie-up: Netflix would be happy to let cable operators take care of billing, but wants to send its video over the Web, just like it always has.

That assumes that the cable guys buy the argument Hastings has been making for some time - that his service isn't for cord-cutters, but for people who like watching lots of video, and don't mind paying another $8 for what is essentially another cable channel.

In so many respects, this is complete utter nonsense. I list several reasons that will clearly show why Netflix is again taking the wrong steps and just burning up cash while time pass by:

• When Hasting knocks on the door of this cable companies, they will be more than happy to say no or provide terms and conditions which Netflix can't fulfill. Already, Comcast said a big NO to Netflix. Other will possible soon follow like Comcast. There is no reason for Cable companies or content provider to make deals with Netflix. It just is not feasible. In a world like ours, competitors do not usually give up their earnings. Just thinking that others will give a share of their profits to Netflix is just laughable. Netflix provides absolutely nothing extra that competitors can want.
• There is a chance that Netflix may survive if it becomes like HBO. However, bundling Netflix with cable will basically shot up the cost that customer will probably refuse considering the dire situation of the economy as it is right now. HBO took a very long time to become what it is right now. Netflix needs to burn and crash like all others and become stronger like HBO someday. And that day is not anytime in the near future.
• The deal with Apple and Netflix has been viewed somewhat bullish for a brief time. However, one must also note that Apple has revamped it model to provide multimedia digital content which Netflix do not control or own. And by giving away 30% of earnings, it is more than likely Netflix possibly will not make much here. And with such uncertainties, the jury remains hanged here. Do you know that you possibly do not need any extra feature to watch Netflix movies on your iPhone? Way before the deal was done, you can simply stream movies through iPhone. So what has this deal provided that was not already there? In my perspective, it seems absolutely nothing that will draw enough extra customers for Netflix to make substantial amount of revenue.
• Companies like Google, Comcast and Time Warner dictates whether Netflix will live or die. It is just a matter of time Netflix will need to sell it off to some big giant or merge with others. Netflix business model do not seem to be providing what shareholders want.
• Price wise Netflix is costlier than Comcast. Comcast provides service for $4.99/month or free ($0) for certain customers with certain package with them. So, if you were to get either Netflix or Comcast which will you get? If both provides similar contents and Comcast can provide better user experience going forward, I will chose Comcast. Netflix cannot make much with such high price subscription cost.
• Netflix faces lower market prices, greater accessibility for consumers to more competition, and higher costs, as Netflix has signed deals for content already and can't increase prices to the end consumer. This is a bad business model and it's tough to see how the company's corporate earnings are going to expand.
• Google recently announced its own entertainment hub, offering movies, apps and games from one centralized location. This is another company that will start to cut in the revenue stream of Netflix. How can one forget Amazon that is another one that is going full throttle into the digital TV arena?

Disclosure: I am short [[NFLX]].

Additional disclosure: I have $NFLX April 95 strike puts and do believe it can go much lower. I do not hold other one mention here but may make trades as seems fit. For instance, I am actively looking to go into long calls of AAPL and GOOG