Apple Earnings - Closed for 7 % Profit
18Jan2007 Filed under: Backspread and Earnings Author: OptionPunditWell, despite the great show, apple didn’t turn out a great show in the stock performance. Since I played non-direction on the earnings, I covered my short 95 call leg for $0.20. This resulted in $95 profit on $1365 investment i.e. 7% in one night. Though apple continue to fall as of this writing, I didn’t want to give my profits back to the market, so clsoed it for 7% profit. This closes my earlier posting about apple which were posted here and here. Not to forget though, I still have 7 Jan 100 calls. Should apple decide to make a comeback tonight or tomorrow, that will be a lottery ticket.
Again as I mentioned Y’day, these speculative trades are only a fraction on portfolio.
The search is on for tonight’s play, stay tuned!
backspread, Earnings3 Responses to “Apple Earnings - Closed for 7 % Profit”
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Been There, Done That
meth
January 18th, 2007 at 11:57 pm
well, if the chart mirrors that of last year, there will not be any recovery. it fell pretty steadily for a few months. if i see $65 i will buy back, but otherwise i can wait til august for aapl to redeem itself for this drop.
nice site btw. did u build it yourself?
optionpundit
January 19th, 2007 at 12:29 am
thanks meth.
No I have not designed the site. It is one of the popular K2 wordpress theme that I have used. I used to provide basic skeleton to the site. Plugin etc can be found on the net widely.
BACKSPREAD : Strategy for large moves at OptionPundit
January 20th, 2007 at 2:29 pm
[...] Let’s take Apple’s example that I played (details are here). I was bullish on AAPL and expected a significant up-move after the earning announcement on Jan 18th, 2007. Instead of buying straight call, I opened a trade in the form of a call backspread. A typical backspread is usually done in a 1 x 2 fashion. In other words, buy twice as many options than you sell but you can always choose your own ratio. In this example, I sold 3 AAPL January 2007 $95 calls for $3.25 and bought 7 AAPL January 2007 100 calls for $1.18. This gave me a credit of $1.65 per backspread. The margins requirement was about $1365 per backspread. After placing this on 17th, I waited for announcement that was on 17th after market close. [...]