Before the open on Monday (article was not approved hence I changed it to become an instablog), I wrote that Apple (AAPL) would most probably come down even further from last Friday's drop, and indeed that happened yesterday, and today it dropped even further.
Too bad I wasn't watching the open, if not I would have gone into an options play, probably a bull put credit spread at 535-540 for at least $0.20 credit for 4 days of exposure on the weeklies. For an average week, AAPL will move within the range of 40-50 points in a week, corrections, a volatile week. So Monday and Tuesday it has already traded a 40 points range. We can pretty much assume very safely that the week's range will be another extension of about $10+ down from $571 or $10+ up from $610.. So my imaginary trade of BPS at 535-540 would be very safe to even initiate at today's open.
A small 4% ROI for 4 days exposure is pretty decent. Imagine making 4% ROI for 25 weeks, in a roll? You do the maths. We will see how AAPL fare tomorrow and see if its possible to get into a trade. Watch this space.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AAPL over the next 72 hours.