Holding onto the Jul '09 $100 AAPL option call to try to squeeze out an extra two hundred bucks in 3 months would have been dumb. The risk of having an overnight Steve Jobs health rumor break through my conditional order into margin call territory greatly outweighs the reward.
I just covered my $100 put at $2.19. I had sold it at $6. Therefore I made a gain of $381 before commissions and $375.10 after commissions.
Wow, I just looked up when I had sold the option. April 6th, less than 3 weeks ago! I try to balance being a trader with being an investor, but this market is moving so fast it has me looking more like a trader. Here's to holding the short $125 put until expiration no matter how low Apple goes to prove that I'm also an investor!*
*Note I said "no matter how low", if Apple shoots up above $150 before July there's nothing wrong with taking gains. If that were to happen I'm not going to chase again by selling another put option at a higher price, at that point I may as well just have bought shares. Above $125 an investment in Apple has a lot more risk as you get further from conservative valuation support levels at $80 and $100.
Disclosure: short Jul '09 $125 AAPL put option
Thursday, April 23, 2009
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