Seeking Alpha

convoluted

convoluted
Send Message
View convoluted's Comments BY TICKER:
  • Wall Street 'Bloodbath' Captured On Live TV [View article]
    Well, play it conservatively. Sell the JAN 2016 400 PUT for 2k.
    Mar 27 10:03 AM | Likes Like |Link to Comment
  • The $500 Apple Put: Backing Up The Truck On Buy Backs [View article]
    I didn't notice any specific advice. But, if one believes the 500 put thesis, the JAN 15 2016 500 PUT can be sold for 61.50. That's 6k in your account now. If one feels the need to hedge a bit, the 300 put can be bought for 5.10, leaving the trade with a max profit of $5,320, and a max loss of $14,680. Of course, the loss zone can be hedged as well by shorting the stock along the way. Or, one could buy another put, which would cut into the $5k gain-but maybe that's ok. Or, one could spend about $6,300 and buy the put, and sell the weekly puts for income. The idea here is to sell enough weekly premium to amortize the cost of the long put. Once that's accomplished, the remaining time will kick out positive cash flow. Personally, I generally prefer to sell option premium, but there are times where volatility skews dictate the reverse. If you intend to purchase 100 AAPL shares and you accept that risk, then I would strongly consider selling the LEAP put.
    No charge.
    Feb 16 09:37 PM | Likes Like |Link to Comment
  • Apple: Forget About $700 And Enjoy Range-Bound Purgatory [View article]
    An APPL by any other name would smell just like a smart phone company. Except for the blue-eyed groupies that want to be on the cover of 'Rolling Stone.'
    Sep 11 04:48 PM | 1 Like Like |Link to Comment
  • Apple Inc. Shares Are Likely Dead Money For The Balance Of Its Fiscal Year [View article]
    I would mention two critical points that are missing in all of the comments, and perhaps not clearly referenced in the article. One is all-encompassing and was made by one of the greatest traders of all time. Livermore's words are as unheeded now as they were in the early part of the 20th century. In essence, he said there's only one side to the stock market, and it's not the bull side or the bear side, but the 'right' side. I've seen this quote and others prominently displayed in numerous offices. Whether trading cotton during WW l out of his New York office, or coming ashore at Palm Beach to trade steel, Livermore went long or short with amazing accuracy. His reference to the "Mike sucker" is as true today as it ever was. Or, if you prefer Keats, think of being perpetually locked in the 'chamber of maiden thought.'
    The other point to be made is that selling option premium via straddles or other strategies such as iron condors, has very little to do with 'investing' in the way that most people contemplate. All that is required is that the underlying stock stay mired in the mud for a relatively short time period. But, it's 'strange' to most people that one can make money off a stock that does nothing (except, where applicable, pay dividends). I'm clearly on record, via numerous comments, that I was short AAPL via bear call spreads-and I made those comments on a real time basis. Currently, I have similar strategies (at least conceptually) to the author, although there's an almost infinite number of possibilities.
    So, in a multi-dimensional cosmos, I don't beseech the force to push a stock higher, or lower- I ask only that I be granted immunity from the reptilian part of my brain, free from bias, and as unemotional as the neon-lit casinos of Las Vegas.
    Jul 24 08:37 AM | 1 Like Like |Link to Comment
  • Senate Slams Apple On Tax Avoidance [View article]
    The politicians are at it again-they already know the answers. This will not be an issue for most Americans anyway, as they are too busy playing powerball. This will get little mainstream coverage and will quickly give way to the celebrity trial of the day-assuming lottery fever dies down.
    May 20 09:54 PM | 1 Like Like |Link to Comment
  • Apple: A $467 Price Floor Set By Share Repurchase Plan And Dividend Hike [View article]
    Your 467 number is pretty good. I picked 460 and sold several of the May 18 460 puts after earnings for a quick pop. Had no idea they would pay off so fast. I've been short for several months prior to this as reflected in numerous comments.
    Not a bull or a bear-just an opportunist. But, however, you make money, be sure to give some to the Humane Society.
    Apr 29 09:30 PM | 1 Like Like |Link to Comment
  • Apple Is Where The Value Is At [View article]
    I don't know where the 212 came from-Can't recall-must have read that a long time ago. I would settle for 180, which would give me a 100 point improvement. Maybe I confused Dickens with Darwin, but as you note, Dickens estimated IQ was certainly extraordinary. I knew it was off the charts. That 212 number applies to someone, now I'll have to figure it out. Maybe I'll go check into a Holiday Inn Express, and wait for the "aha" experience. Let me know if if you think of the owner of the 212.
    Apr 21 10:17 PM | Likes Like |Link to Comment
  • Apple Is Where The Value Is At [View article]
    Great article and commentary. Just one tiny, little, unexplored topic that apparently went by the wayside-how do we make money? Monte Carlo simulations worked great for Oppenheimer and staff- but real people with all their emotions revert to the lizard part of the brain when confronted with a loss. Dickens supposedly had an IQ of 212. What would we pay the 'ghost of the stock market future' to reveal AAPL's ultimate destiny-earnings to earnings with ample time to establish our strategy? That price we could simulate.
    What's the next best thing?
    For $2,950 you could buy the ATM straddle (April 26/ 390 put/call). You can lower the cost by adding (selling) a short strangle-but your gains will be capped. One could also allow a bit more time and buy a straddle with more room to run (May, June...). All of this anguish simply because we don't have a time machine. Would it be sufficient to perform 2 quadrillion operations in a second? Well, "Edison" the supercomputer makes an entrance later this year. Edison can track even the ultrafast trading systems now in place. Unfortunately, our own internal computer is still trapped in a tangled web of fear, bias, lazy heuristics and on and on and on.
    I have figured out how to download apps on my iphone-up to 20 or so(some were already loaded, and 4 relate to weather reports). So, I guess I'm long AAPL-at least partially.
    Apr 21 02:13 PM | Likes Like |Link to Comment
  • Apple $395: Time To Give Up And Abandon Ship? [View article]
    Well, you are no longer a 'rookie'-you should give yourself a promotion to "Veteran IRA"-maybe even Admiral IRA-but that would likely entail more work for an inconsequential raise.
    You made some great points that deserve a bit more perspective-although I admit that it's very difficult to acquire a suitable level of understanding from reading comments and opinions. But one thing I want to note is your comment regarding delta-or the rate of change in the option relative to the change in the stock price. First, you are correct in your description. But, if one looks at their screen while volatility spikes or moves up, the adverse position will hit a delta of 1, and then move dollar for dollar with the stock. The mitigating position will not move likewise, although the ultimate result will be achieved as expiration approaches-other things equal. (This basically means that the stock moves and remains at a point completely adverse to the spread). Most trading programs reflect an ongoing 'net' value-showing gain or loss on a continuous basis. This can mislead someone not aware of how options work-particularly in a spread. Combined with the accounting presentation, is the issue of how spreads work. For example, a bear call spread will offset a bull put spread where AAPL declines in value, but, it's possible that there will be a time line where the bear call spread appears to be running against one as well. The reason for this again is the delta effect. So, it's possible that the long part of the bear call spread will lose money faster than the short side. You have to mentally note that you are owed a "receivable" so that it's added back to your 'net' position.
    It's certainly possible that one could have 2 bear call spreads hedging 1bull put spread (for example) and, while the future balance will end up in your favor-the moment you observe the option positions could be misleading.
    You also make a good point about how a structured position can turn around and run in your favor. I can't explain 25 years of experience in a useful summary. I did this for a living, and I would be totally lost trying to perform brain surgery. But, I'm thinking that anyone can learn basic first-aid, and often that's enough to make a big difference.
    Thanks for your observations and ideas. Your input will hopefully encourage others to at least reflect on another dimension of investing.
    Apr 20 09:06 PM | Likes Like |Link to Comment
  • Apple $395: Time To Give Up And Abandon Ship? [View article]
    AAPL is a poster scenario where the retail guy gets slaughtered and butchered because of a lack of understanding option basics. I'm not talking about 'esoteric' strategies-just a basic collar or simple put. The case can be made that the nimble traders are capitalizing on this ignorance. In other words, if everyone had insured against loss, there wouldn't be a loss-or it would have been mitigated.
    But, now's not the time to be emotional, or rationalize the state of affairs one way or the other. It's been noted that AAPL now has what I would call 'fractional' options-meaning that 10 shares allows one to do the same thing the bigger players do. So, does one continue to whine (if they're long), or learn to mitigate their position and actually turn the tables in their favor? If you bother to note my comments going back several weeks, I've made a lot of money being net short. When the div yield hit 2.5% (or so) recently, I sold put spreads (meaning I thought AAPL would go up). I think the general deterioration of the market enhanced AAPL's continued downward move, but I was quick enough to short 300 shares for every long position. Now I can leave the short put spreads in place because (a)the downside long put covers any further drop, and (b) the quick short (only about 12 business hours) covered the differential anyway. And, I've already made money on the dominant net short strategy.
    But, none of this is outside the ability of most folks. You just can't be fixated and biased/blinded-either way. A tip for small holders of the stock would be to look at a 'rehab' strategy using the new options. I personally haven't looked at these because I use the standard issue. There is likely an article on SA about stock rehab. I would encourage people to research this area. Essentially it involves selling a covered option against your existing shares and buying a bull call spread-where the two sold options will cover the cost of the long option. If one person learns from this and the 'light' goes on-I'll be a happy retired camper. Not yet a 'geezer' though-haven't been reported as missing.
    Apr 20 09:18 AM | 7 Likes Like |Link to Comment
  • Apple: Still Too Risky Except When Paired With These 4 Stocks [View article]
    The potential problem with the paired approach is that one can be (a) wrong and (b) wrong. A double whammy makes for a bad day.
    (I learned this many years ago-the hard way. But I don't make the same mistakes twice).
    Another approach: Agree with hedging, but utilize bear call and bull put spreads to collect premium income. AAPL has a lot of "time" and now "percentage allocation" strategies within an options framework. One reason AAPL seems more volatile is that it's 'expensive' from a retail pocketbook perspective. Heretofore, a reatil investor wouldn't consider it economical to buy a put to cover 25 shares. Nor would one sell a call against 25 shares. Thus, the small investor is, or has been, at the mercy of large players. As noted by Rookie IRA in his articles, options are now available for 10 share lots. So, AAPL has been subject to a 10:1 stock split (on a de facto basis).
    Logically, one would expect a bit more stability in the stock-but it remains to be seen if Joe Retail will learn to utilize the new tools at his disposal. Today, I'm making money on bear call spreads (and losing on bull put spreads). As the bear call spreads approach expiration, I'll pocket the gains and roll out the bull put spreads. Of course, I'll keep selling bear call spreads, and adding to the bull put spreads. So, whether AAPL goes up, down, or sideways-I have to confess- I don't care. But then that's my trading philosophy.
    Apr 15 11:15 AM | Likes Like |Link to Comment
  • Analyzing Apple From An Absolute And Relative Value Standpoint [View article]
    Amen (corner).
    Apr 13 07:25 AM | Likes Like |Link to Comment
  • Analyzing Apple From An Absolute And Relative Value Standpoint [View article]
    If you knew that by 2015 AAPL would either drop to 0 or go to 1,000, what is the best play? Well, an ATM straddle would produce an enormous profit-irrespective of the binary outcome. But, is there an intermediate strategy that would pay for both the call and put, at which point one would get a free ride to the finale?
    I just asked a waitress this question in Augusta, Ga. and she's thinking about it. I think she prefers a cash tip though.
    Apr 12 10:59 PM | Likes Like |Link to Comment
  • Apple: Major Concerns Overstated And More Than Priced In [View article]
    never, ever violate the 5% rule-
    if you check my comments re AAPL for the last several weeks-I've made a lot of money being on the short side-that strategy has nothing to do with 'fundamentals'-
    AAPL has long been a volatile stock, and perhaps the most extraordinary story in market history- aside from all of that, those of you that are anguishing over being long can sell calls (I understand that there are fractional or mini options available)-and derive additional income-don't just sit there and get your head bashed in- if all the long holders would sell calls, the stock would go back up!
    So, it's a waste of time to talk about pe ratios, cash on the balance sheet, etc. Learn how to benefit by up and down moves (especially down moves).
    Apr 1 02:23 PM | 1 Like Like |Link to Comment
  • Apple Won't Just Roll Over And Die [View article]
    Over the past several weeks, I've been short AAPL via bear call spreads. I thought I was tempting fate to keep doubling down the last few days, but I suspect some smaller funds are over loaded with AAPL. I suppose I should get a real job-too late already retired. This has been way too easy- Will continue to be short until I sense an equilibrium. I think AAPL is a great company, and have several of their products. But, a hot stock can get too much love, and no passion can be continuously sustained without some respite.
    Mar 28 03:07 PM | Likes Like |Link to Comment
More on AAPL by convoluted
COMMENTS STATS
1,675 Comments
1,906 Likes