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Option Plays - AAPL

These are the results from trades suggested on our "Current Plays" list.

Note: they are suggested entry and exit points! disclaimer   Profits Up!!



Stock Information
Company Name: Apple Inc.

Stock ticker symbol: AAPL

Current Price: $405.46 -0.66

Price when posted: $406.13

52-week high: $705.07

52-week low: $419.00

Dividend yield: 2.50%

Volatility: 43.39%

VWAP: 402.01

EARNINGS: 4/23/13


Trade Bias: Cautiously Bullish

Trade Type: Options / Stock










Archived Plays


AAPL TRADES                                                             

  Symbol Month Strike Type Date Strategy Qty Entry Exit P/L ROI% Days

CLOSED TRADES    Model Portfolio






White Whale




4.50 +4.45 +9,000% DT













If you were on this whale hunt then you should be very pleased! All the strikes were hit, but the $420 weekly was the prize!


I could not believe I actually got filled at .05 cents!


Once I saw that long wick tombstone DOJI forming on the 1-minute chart, I was profit stopped out!


Later in the morning session, you could have bought in again for .50 cents and caught another ride to $1.50—no problem getting filled today because these 420's traded over 40,000 contracts.


I am on the hunt for the next White Whale trade.


When you can make multi-thousands in profits like this, I am pretty much not going to be doing anything else going forward other than collecting premium selling spread strategies and fishing for more White Whale and Lotto Trades!


Here are what the other strikes I liked did today.


Next time, I will place fishing orders on all of them so I can buy MORE contracts and have a much better chance of getting filled on everything!


I did NOT buy any new puts at the close because AAPL held its ground, so I will wait to see how the stock settles out tomorrow.






4/24/13 - OK, HERE WE GO...



6:34 AM - WOW I got filled!! Here we goooooooooooo....AAPL!!



AAPL is down under $400 in pre market!!! Just what I was hoping to see. I will be placing my orders for the $410, $415 and 420 strikes with the anticipation this pullback will wear off and AAPL will catch a bid and rally back to yesterday's after hours high of $430. Looking for prices UNDER $1.00 hope to get filled in the .05 - .10 cent range on some too.



If the stock rallies up early today, I will also buy some $380 - 390 Wk4 and  puts if I can get any of those for less than $1.00. That is where the 200MA is which is the next major support for AAPL where the stock should bounce back up from. Remember, AAPL announced an increase in their stock BUY BACK so that will keep it from diving in price once the initial move this week has played out.







4/23/13 - AAPL beats estimates by a small margin, but gross margins shrank. When trading resumed everything appeared to be going gangbusters as the stock made a move to $430. Once the conference call started, the buyers headed for the exits and now it's getting crushed back down to $400. THIS IS THE MAKINGS OF A WHITE WHALE TRADE TOMORROW!!!!!!!!


The expected move at the close was:


AAPL almost reached in in after hours trading:




The movement in AAPL is subjective to interpretation of the fund managers that buy and sell in millions of shares. Even though AAPL reported a “good” quarter, they showed lower projected revenue in the future—the company's gross margin shrank to 37.5 percent compared to 47.4 percent a year earlier.



Apple (AAPL) shares surged in after-hours trading after it beat earnings forecasts and doubled the amount of cash it will return to shareholders. However, its outlook fell short of expectations. Apple reported fiscal second-quarter earnings of $10.09 a share on revenue of $43.60 billion versus $12.30 a share on $39.19 billion a year earlier.

Analysts had expected the tech giant to report earnings excluding items of $10.00 per share on revenue of $42.33 billion, according to a consensus estimate from Thomson Reuters.


When stocks only meet or slightly beat the “estimate” that is not necessarily a good thing. Surprise beats of earnings estimates, split announcements, dividends etc., is the key to sustained higher prices the next day. That is why I prefer puts over earnings because even slightly bad news can cause a stock to drop 10% or more the next day.


Even though AAPL beat estimates and also increased its dividend 15 percent to $3.05 a share; and said it will expand its share repurchase program to $60 billion from the $10 billion level announced last year; that is most likely being viewed (by analysts and pundits) as an act of desperation to prop up the stocks share price—too much too late.


All stocks are priced on future earnings not past, so when a stock only meets or slightly beats, that is already priced in on the future. Billion dollar fund managers have to move large capital; and that takes time to load up on shares, but for AAPL, they have been dumping it for several months; the price action in after hours confirms there is NO BIG MONEY ready to step on the buy button; and that is why the stock is selling of right now—this can change by tomorrow.


The good news is that AAPL rallied showing us the target resistance; and now that it is selling off in after hours, we have a chance to pick up the the 425 calls for a White Whale trade. We want to pick a strike price inside the movement of tonight’s action so we have the best chance of being ITM if big money investors decide this news is a buying opportunity and lifts the stock back to $430 or higher by Friday.


On the other hand, if the stock gaps up in the morning, then the $390 puts are the target in the anticipation the rest of the big money investors decide this stock is DOA and dumps it the rest of the week.


I have started doing Butterfly spreads because the risk is so low compared to the reward; however, the stock has to hit your target zone to make profits and so far, both of my Butterfly spreads are not looking like they will make any profits.


I am going fishing tomorrow for a White Whale trade and hope that AAPL dips in the morning testing $400; and then takers off back to $430 by the end of the week so I am looking to get in on the $420 or 425’s; and hopefully I can pick them up for less than $1.00 per contract.


If AAPL gaps up, then I will try for the $380 or $390 puts if I can get them for $1 or less.


If you are looking for a better odds play to make some profits, then consider selling spreads outside the expected moves and try to collect premium others pay to speculate a large move—the risk is capped but so is the reward.



Profits Up!

The donFranko







I added another Butterfly 440 / 445 / 450


So far AAPL is sticking around $400 - $405 in the morning session of trading.


The expected move tomorrow is currently at +/- 25.95




That puts AAPL potentially at $428 or $378, so the lotto trade strike for the best opportunity of being ITM tomorrow would be the 425 Calls and/or the $380 puts



As you can see, they are quite EXPENSIVE so if you did a straddle then your break even would be:



This is just too much expense for my liking; however, we have the rest of the week for this to work out. Since it's widely expected they will miss, I feel the low end is pretty much already priced in so I am going to do a Put Butterfly at the expected move because that is where the 200MA is sitting at $380.00





I bought the 430 Call Butterfly at the expected move:


I am going to speculate on the 440 and 455 call side because if AAPL surprises and/or announces something new, the shorts will cover and UP we go.



Tomorrow I will fish for the White Whale trade opportunity after I see what the reaction to the earnings is.





Profits Up!

The donFranko



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