SheridanTV LIVE at 1pm CT. Dan talks an AAPL Trade.
Join Dan and Johnny today at 1pm CT.
Dan is going to talk about the best option trade in AAPL.
Watch Free and LIVE only at www.SheridanTV.com
Wrong Data on AAPL, new prices and strikes for Bullish Butterfly
I apologize, used wrong price information on AAPL. Was looking at AAPL in our back testing software and had the wrong date. What to do today. AAPL is backing off again today and sits around the $126 level. Shock? No, the stock is still up 15% over the first 4 months of the year! I still like the stock and am comfortable in this 124-126 area establishing a slightly bullish limited risk strategy like an Bullish Call Butterfly. Focusing on the calls in the May 29 expiration series. I’m considering this Bullish Call Butterfly. Buy one 126 strike, Sell two 128 strike, Buy one 130 strike. Total debit is $20. If I do the trade 1-2-1, total debit or cost or risk is $20. If I do the trade 10-20-10, the total debit, cost, or risk is $200.
Wrong Data on AAPL , new prices and strikes for Bullish Butterfly
I apologize, used wrong price information on AAPL. Was looking at AAPL in our back testing software and had the wrong date. What to do today. AAPL is backing off again today and sits around the $126 level. Shock? No, the stock is still up 15% over the first 4 months of the year! I still like the stock and am comfortable in this 124-126 area establishing a slightly bullish limited risk strategy like an Bullish Call Butterfly. Focusing on the calls in the May 29 expiration series. I’m considering this Bullish Call Butterfly. Buy one 126 strike, Sell two 128 strike, Buy one 130 strike. Total debit is $20. If I do the trade 1-2-1, total debit or cost or risk is $20. If I do the trade 10-20-10, the total debit, cost, or risk is $200.
AAPL CSP for AAPL lovers!
Looking at selling 1 May 15 expiration 123 put for $1.00. This gives me the right to buy the stock at 122 over the next 2 weeks.
AAPL Trade Idea
Oh, how I miss the expensive AAPL stock price before the split, let me name the ways: More premium for credit spreads, less commissions because I didn’t have to do as many contracts with a $500 stock price. Any positive things about the split? Yes, liquidity, which was great before the split, should be better. Why? Option bid/ask spreads will be narrower and more folk will be trading options with these cheaper stock prices. Option Volatilities are a bit higher, maybe 15%, than before the split. At-the-money Implied volatilities are around 20 now and they were around 17 before the split. This is pretty normal when stocks get less expensive after a split, moderate increases in Implied Volatility usually result.
Range Bound Trade with great risk/reward? Iron Butterfly (2 Credit Spreads). AAPL price around $91.90
Using the July 3 expiration, Buy one 95 call and sell one 92 call. In the puts, buy one 89 put and sell one 92 put. Total Credit around $210. The total risk if AAPL goes to zero or up to a billion is $90. How did we get $90 Maximum loss? If AAPL goes to zero, I did a 3 point wide put credit spread that will max out at a $300 loss. Subtracting the credit of $210, that leaves us with a potential $90 loss. Great risk/reward to bring in a potential profit of $210 with risk of only $90. I like Iron Butterflies for shorter term trades, (the July 3 expiration for this trade is about 16-17 days from expiration). Where would I worry a bit about this trade and either exit or adjust the trade? Near the expiration Breakeven points of roughly $90 on the downside and $94 on the upside. How much money would you probably put up at your Broker for this trade? Depends on your Broker, but the number should be around $90, the risk of the trade. Should I try to make the entire Credit? No, that would require AAPL being exactly at short strike of $92 in about 17 days, tough to hit the Bulls eye like that. I would shoot for maybe 25% of the credit or $50 per 1 Contract . That would give us about $50 profit on $90 of risk or capital if I did this 1 contract.
Work on the Craft and have a great day!
Dan Sheridan
dan@sheridanmentoring.com
AAPL June Bullish Play
This is a Bullish play in AAPL for the June expiration. It is inspired by one of the Sheridan mentoring resident AAPL experts and my friend , Leo Andrade. With AAPL at around $518 , I am going to take a bit of a bullish bias as I look out to June. The strategy is a Bullish Butterfly: Buy 1 June 530 call , Sell 2 June 540 calls, Buy 1 June 550 call for a total debit around $70. The good the bad and the ugly: if the stock goes to 540 over next 30-66 days, great! If it goes to $540 over next week, we yell ” Where’s the beef”! In bullish Butterflies, we want the stock to go near the short strike, but closer to expiration , not right away.Total risk is $70 cost, just like a long option. Directional Butterflies are very forgiving. If we go outside profit area of 530 and 550 over next 30 days, the spread doesn’t go against us nearly as bad as if we go out side our profit area of 530 and 550 near expiration. This is a cheap speculative trade of $70. If I did it 3 times, 3-6-3, it would cost 3 times $70 or $210. My plan is to make 50-60% on the cost of the trade.
