Buy AAPL Jul 185 calls
That's not a typo folks, I bought calls. Readers know this is unusual for me, that 80% to 90% of my trades have been selling options, usually after earnings, not in front of them. Using a baseball analogy, this a home-run swing for a person who is more typically a singles hitter. Positive factors include big misses by some other tech stocks, and AAPL has been beat down to a chart support level. Rumors about the health of Steve Jobs helped sink the stock this morning. I am buying in the middle range here, not at the lows.
Apple options are pricing in about a 10% move on earnings tonight. This means straddle sellers break even on 10% up or down, straddle buyers need more than a 10% move to make money. (A straddle is buying both a put and and a call.)
Positions: long BUD, AAPL
1 comment:
I'm optimistic going into AAPL's earnings report as well - but I find it hard to pull the trigger ahead of the quarter. Given how volatile the market is, it seems like there will always be another entry point - very few stocks can keep their momentum going.
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