Play Recommendations:

Lotto Weekly Options:

Calls - 650's and 620's

Puts - 580's and 530's

Aug Options:

Calls - 630's

Puts - 540's and 520's

7/25/12

The day of reckoning for AAPL earnings came and went, and well, my options trade went the way of oblivion too; unless you were there at the open and able to slam in a quick sell order, then you may have been able to salvage some of the trade on the 580's. Of course, the 530's are a bust this time around, but I suspected this lotto trade would most likely not work out. As for the Aug expiration, we have lots of time to see if things become interesting.

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7/24/12 - AAPL MISSED earnings on both EPS and revenue — OUCH!

The stock took a hit in after hours, but seems to be holding up much better than any other stock would with these numbers. I venture to say this stock has a whole lotta love and investors look at this as a buying opportunity. Of course with the dividend coming, that will put the breaks on for a short period of time, but if they continue to miss (now two quarters in a row) then investors will definitely take profits off the table in a very big way.

As I suspected yesterday, the trades on this stock were most likely NOT going to be profitable, so I hope you did a small contract load as suggested.

The 580 puts might end up making some profits on the weekly trades, but I do not expect it to be big enough to pay for the losses this time around.

I will be looking for opportunities to capture longer term moves and make up these trades that did not work out today.

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7/23/12 - Tomorrow is a very big day for AAPL. Will they met, beat or get whacked? I am looking for them to beat of course, but will it be by a wide margin? There is nothing left to move the stock higher if they only have moderate earnings, but the upcoming dividend should keep fund managers hanging onto any shares they currently have. The challenge is we do not have the dividend payout date set, so that could quiet things down on the upside action.—then again, it's Apple and anything can happen!

Okay, the challenge with this trade is the massive premium that will be packed into the options. Event the weekly options will be super expensive, so you are not going to see a massive winner like we had last week with CMG but you can still see some nice profits for sure. Just do not get greedy and load up.

Today was quite the volatile day for apple. The stock gapped down sharply below the benchmark $600 price but found buyers at $588 and rallied back over $600 to close at $603.84. This show's there are some very nervous investors out there and any bad news could see a drop even bigger than we had on CMG last week.

Looking over the Daily chart, we see the 200 MA is all the way down at $500, so that means there is plenty of room for this loved stock to fall from the Apple Money Tree. The first line of support is $565 then $520, but if things get ugly, you can rest assured it will plummet to the 200 MA.

On the other hand, if they beat, and it's well received, I would be looking for an easy new high and race to take out $700 over the next few weeks to couple of months. After all, where else are you going to put your money to work?

The weekly chart shows you there has been two weeks of indecision; however, the volume was light so, when the trend is set, it's gong to be a big move in either direction.

Next we are looking over the options.

On the call side, there is quite a bit of open interest on the 610's (6,140) and the 620's (5,785). This is the battle ground upside targets. The premium you will pay to be $20 OTM is $8.75, so that means the stock must trade at $30 or higher by this Friday to make you a profit. It certainly can, but wow, that's a lot of money to lay for a relatively small return. By comparison, the puts open interest is less than half, so you know everyone is looking for this stock to move much higher. Of course I am going to straddle it, and if they miss, its going to be a very profitable play on the put side.

If you are not willing to gamble on weekly options, then the Aug 620's are asking $14.60 which means AAPL must trade above $635 by Aug expiration. Now it certainly can achieve that over the next four weeks if there is market support etc. On the put side, the $550's have a whopping 14,216 contracts in open interest.

No matter what directions or strike you look at, the price to play is expensive, so make sure you can afford a total loss if this stock does not move...it can happen.

This is why I like to do my Day Trading strategy for making easy profits to pay for the Lotto speculation plays. That way, I can lay a lot of nets and not worry about the fish that get away because I know I will be catching several White Whales over the trading year!

Learn how to hit the Options Lottery here.

Profits Up!

The donFranko