Monday, December 1, 2014

Trading Summary: Apples and no oranges

I added a new position of Apple today.  I was thinking of adding another because I often get the feeling I don't trade enough (don't make enough attempts), but I had second thoughts and decided to leave it at that.

The brick:

5 contracts AAPL (Apple Computers) April 2015
Max profit $393.09
Max loss (2.5k-393.09) $2.1k
Days to expiry: 135
Max Yield on risked capital: 19% 
Projected annualized gain for worthless expiry: 50% 
Why did I make this move?  I watched the algos initiate HUGE selling on apple.  It dropped very quickly so after the dust started settling I found a reasonable trade (for me) on AAPL.  The premiums jumped up a bit as a result of the bot-selling.
For this trade to be in danger, Apple will have to fall MORE than 16%.

I had recently closed an April Apple spread, but it's strikes were MUCH lower.  April is still a long way away so I have time to wait out any current market instabilities.

Stay HUNGRY my friends.

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