Sold some apple front month puts here

[RayJohns]

Sold 20 contracts today (Apple 195 December puts) to make a couple of dollars. Looks like a fairly low risk trade given that Apple's earnings and P/E are unlikely to contract all that much over the next few weeks. Never say never, but with any luck the stock will hold around 200 or so through expiration. On an annualized basis, the options are providing roughly a 20% return on your money.

I sold them at $3.45 a few minutes ago.

Ray

[RayJohns]

sold another 20 contracts of the Dec 195 puts today at $5.95...

Ray

[RayJohns]

Covered the 40 puts this morning on the open at $1.97 (limit was for $2.00 or better). So to recap: sold 40 Apple Dec 195 puts at an average cost basis of $4.70. Covered them at $1.97. That's a difference of $2.73 across 40 puts X 100 shares = $10,920 before commissions.

I figured it was worth closing now and taking less than the ultimate $18,800 return, so that I was able to flatten the position and reduce the risk of holding through the final week of options expiration. Never forget, selling also gives you the flexibility to take up a fresh trade should the market decline instead of rally, etc. That's an often overlooked value to taking profits.

Anyway, just wanted to follow up on the trade there.

Ray

[RayJohns]

Just sold 10 Google Jan $590 puts here for $9.00 each. Symbol GOPMS. As long as google stays above $590 through January, then the premium received would be about $9K upon expiration. The stock would have to close at $581 for break even.

The Apple options above (while I covered early) expired worthless; so anyone who made that trade and held through expiration would have realized the full premium on the contracts.

Ray

[RayJohns]

covered the 10 google $590 puts this morning on the open at $3.00 - net gains $6K on the trade. Due to the strong move in GOOG, it's very likely that the $590 puts will expire worthless, however I elected to remove all risk on the trade by covering.

Ray

[RayJohns]

bought 2000 shares of AAPL here at $215.00. Also, sold 20 Feb 220 calls at $9.25 (ticker AJLBX). So the sale of the options (should they expire worthless) nets about $18K. This reduces the cost index on the Apple shares to $206 roughly. If the stock rallies, then it may be called away at $220, which is fine. That would net a $10K profit on the shares, plus an $18K profit on the options. If the stock trades more or less flat, then still should make $18K or so from the options while remaining break even on the stock. If AAPL dips down around $200 again, I'm buying more shares and probably covering the calls :-)

If all goes as planed, then the yield on the $430K should be around 6 or so percent for about 45 days of exposure. That's a lot better than what banks are currently paying...

Ray

[RayJohns]

covered the Feb 220 calls today at $1.50. Also sold another 20 contracts of 200 Feb puts at $7.00. Looking to sell 210 Feb calls on the remaining 2000 shares of Apple.

Ray

[RayJohns]

picked up some apple Feb $200 calls yesterday at 2.35 per contact (50 contracts total).

Ray

[RayJohns]

Originally Posted by RayJohns

picked up some apple Feb $200 calls yesterday at 2.35 per contact (50 contracts total).

Went ahead and sold those at $2.70 today in order to reduce risk and maybe reposition a bit. Apple's been looking a little weak lately, as has the entire market.

Ray

[RayJohns]

Originally Posted by RayJohns

Also sold another 20 contracts of 200 Feb puts at $7.00.

Covered the 200 feb puts today at $6.45. As mentioned above, looking to reposition a bit here as we move nearer to expiration. Not my best options trade ever, but at least didn't lose any money :-)

Ray