Seeking Alpha

ngraf

ngraf
Send Message
View ngraf's Comments BY TICKER:
  • Apple: Get Ready For January 18 [View article]
    McGonicle:

    I have an active trader account with Fidelity and I can make a multi-leg spread for $5.95 + .75 per contract. So I made the 4 leg spread with 5 contracts per leg for a cost of $20.95. I made this trade and closed out the 535 Call on 1/23 in the morning when AAPL was advancing to allow the gains and not be restricted by the 535 Calls sold. I then closed out the entire spread before the close on 1/23 with a $3,500+ gain. I decided the risk to the downside was too great and I wanted to keep my profits. This turned out to be a nice two day trade. I wish they would all work this well LOL.

    I hope this helps.

    Norm
    Jan 25, 2013. 10:18 AM | Likes Like |Link to Comment
  • Apple: Get Ready For January 18 [View article]
    Excelent spread recomendation Koolge. Thanks.

    Any thoughts on an earnings spread?

    Norm
    Jan 18, 2013. 04:24 PM | Likes Like |Link to Comment
  • Apple: Get Ready For January 18 [View article]
    madbcolumbus:

    AAPL closed at 500.00. That's incredible. The big institutions have total control.

    Good observation, thanks for the comment on this article by Joe.

    Norm
    Jan 18, 2013. 04:21 PM | 3 Likes Like |Link to Comment
  • Apple: Get Ready For January 18 [View article]
    Joe:
    Your article was right on the money. Thanks for sharing. You saved me alot of money on the Jan 19 spread I had written. I had written Jan 19 Puts @ 495 and bought Puts @ 485. Your analysis and foresight gave me the courage to hold onto the spread and not close prematurely. You saved me about $1,800 on the 10 contracts.

    I'm planning on executing the following trade before the close today for a debit of approximately $7.85:

    I compiled this spread around 12:00 so the actual amounts will vary somewhat when I execute today.
    Buy Jan 25 505 Calls @ 15.95
    Sell Jan 25 535 Calls @ 6.10
    Sell Jan 25 490 Puts @ 14.65
    Buy Jan 25 485 Puts @ 12.65

    Max Gain = $2,215 per cotract at share price of 535
    Breakeven = 512.85
    Max Loss = $1,285 per contract at share price of 485

    If we get a big movement either way on the earnings report, I will close some of the legs.

    All comments on this spread are welcomed.

    Jan 18, 2013. 02:35 PM | Likes Like |Link to Comment
  • What Is The Right Strategy For Apple Now? [View article]
    Here's the same spreads using Dec 22 Weekly options:

    AAPL @ 538

    Bear Call Spread:
    Sell Dec 22 560 Calls @ 3.95
    Buy Dec 22 570 Calls @ 2.30
    Net Credit = 1.65
    Max Gain =1.65 Per Contract
    Max Loss = 8.35
    Breakeven = 561.65
    Return on Risk = 19.76%

    Bull Put Spread:
    Sell Dec 22 515 Puts @ 4.55
    Buy Dce 22 505 Puts @ 2.92
    Net Credit = 1.63
    Max Gain = 1.63 Per Contract
    Max Loss = 8.37
    Breakeven = 513.37
    Return on Risk = 19.47%
    Dec 12, 2012. 04:00 PM | Likes Like |Link to Comment
  • What Is The Right Strategy For Apple Now? [View article]
    I agree with your Bull Put Spreads and Bear Call Spreads. I have been trading these very successfully since May using weekly options.

    I use options that are $20 below the current share price for the Puts and $20 above the share price for the Call Spreads with a $10 difference between the sell and buy strikes.

    By placing both the Bear Call Spread and the Bull Put Spread, you create a Short Iron Condor in your brokerage account which gives you a good margin requirement and leverage. Also you won't lose on both trades since they are in opposite directions from the market with a $40 difference in spread strikes

    An example of my spreads using this weeks options is as follows:

    AAPL currently trading at 539

    Bear Call Spread
    Sell Dec 14 560 Calls @ .89
    Buy Dec 14 570 Calls @ .34
    Net Credit = .55
    Return on Risk = 9.44%

    Bull Put Spread
    Sell Dec 14 515 Puts @ .93
    Buy Dec 14 505 Puts @ .47
    Net Credit = .46
    Return on Risk = 4.82%

    You will most likely be profitable on both trades and that's a nice return for just 3 days left until expiration. Compare that to the Feb. Iron Condor that was suggested in the article you referenced by your fellow Seeking Alpha contributor..

    Try runnung the spreads for the Dec 22 options and you will get an even bigger return on $ and %.

    I love the Bull Put and Bear Call Spreads.

    Norm


    The key is to use the weekly options to take advantage of the rapid decay of the premium and execute Credit Spreads for both types of spreads. You also need to manage closely in case of big price swings.
    Dec 12, 2012. 03:10 PM | 1 Like Like |Link to Comment
  • How To Take Full Advantage Of Apple's Correction Using Option Leverage [View article]
    Thanks for your reply Scott. I respect your opinion. I like the weeklies vs the long term monthly options because of the rapid decay of the premium. I write these deep out-of-the-money puts on the weekly options on a regular basis. I try to limit these spreads to when the underlying shares are advancing instead of declining like they have been recently.

    I understand what you're saying about the risk / reward, but since I'm $20 below the current price and the time horizon is only one week, I have some cushion to cover if the spread turns against me. If I would compare the profit of $1.72 weekly for 11 weeks for a total profit of $18.92 vs the profit on the Jan puts of $3.80 it's worth the extra risk to me, especially since I'm $20 below the current price each week.

    In addition to the puts, I do a similar Bear Call Spread on the calls, which reduces any potential loss for the puts. I usually go 25-30 above for the calls if the shares are advancing. One of these spreads has to be successful every week, since they both can't fail.

    I still like your Jan call spread and will sell the puts weekly reducing the cost of the calls to zero. Good article.

    Thanks again for your thoughts.
    Nov 4, 2012. 10:09 AM | Likes Like |Link to Comment
  • How To Take Full Advantage Of Apple's Correction Using Option Leverage [View article]
    1234gel:

    I agree with selling options and I sell deep out-of-the-money ($20 above and below share price) weekly calls and puts on a regular basis. That's why I'm looking for other comments. This looks like an excellent way of reducing the cost of the Jan calls. Otherwise the premium just eats away at any profit potential.

    Thanks for your feedback.
    Nov 2, 2012. 02:33 PM | Likes Like |Link to Comment
  • How To Take Full Advantage Of Apple's Correction Using Option Leverage [View article]
    Scott:

    Thanks for the article. I've been considering a strategy like you suggested and I like your thoughts. I'm planning to modify your strategy and add a Bull Put spread to further reduce the cost of owning the Jan Calls. I would appreciate your thoughts on the strategy below.

    My thoughts using current option prices are as follows:

    AAPL is trading @ 591.83

    Leg 1 Buy Jan 605 Calls @ 25.25+
    Leg 2 Sell Nov 9 610 Calls @ 2.28-
    Leg 3 Sell Nov 9 570 Puts @ 2.75-
    Leg 4 Buy Nov 9 555 Puts @ 1.03+
    Net Debit = 21.25+

    I would repeat legs 2 through 4 each week trading the weekly options using strikes that are approximately $20 below and above the share price each week, Trading the weeklies reduces the cost of ownership of the Jan Calls by approximately $5.00 each week so the Jan Calls would be at zero cost after only 5 weeks.

    All comments on this strategy would be greatly appreciated.
    Nov 2, 2012. 12:52 PM | Likes Like |Link to Comment
  • How To Take Full Advantage Of Apple's Correction Using Option Leverage [View article]
    To Vertical Spread:

    I too like vertical spreads, but the modified calendar spread He is suggesting makes a lot of sense. Buy the January 600 Calls you referenced, but instead of selling the Jan 605 calls, sell the weekly calls over and over again each week. You take advantage of the rapid time decay in the weekly calls versus the slower time decay in the Jan calls. You will make money selling the calls each week and end up with a profit for selling the calls as well as the profit from the long calls. You can also roll the weekly calls up each week and keep selling at higher strikes. Look at the Theta for the weekly calls versus the Theta for the Jan calls. Using his 595 Call and selling 615 Weekly Calls you net .18 per day per share profit. I really like his spread using the weekly's.
    Nov 1, 2012. 05:19 PM | Likes Like |Link to Comment
  • What Happens If The iPhone 5 Flops? [View article]
    ALL the cool kids are doing it.
    Sep 10, 2012. 09:09 PM | Likes Like |Link to Comment
  • 3 Big Reasons Apple's Ascent Will Slow [View article]
    I would like to suggest a good alternative strategy for making continuing profits on AAPL. I have been trading Bullish PUT Spreads on deep out-of-the-money PUTS very successfully. I write the spreads $20 below the current price by selling puts $20 below the current price and buying the same number of puts $25 below. I'm using weekly options that expire rapidly and have made a nice profit on each trade. I also figure that if the shares do drop $20 it's a good point to buy shares at the price you sold the puts.
    Jul 13, 2012. 12:05 AM | Likes Like |Link to Comment
More on AAPL by ngraf
COMMENTS STATS
22 Comments
8 Likes