8.2 C
New York
Thursday, March 28, 2024

Top Trades for Mon, 01 Jul 2019 10:12 – AAPL

0
Top Trades for Mon, 01 Jul 2019 10:12 – AAPL
psw-placeholder

CMG/JMD – Keep in mind we got really burned on short calls on them at one point – a bit dangerous.  CMG isn't cheap now so I wouldn't take any position – the key to our success is PATIENCE – we initiate these positions when a stock is low in the channel – not at the top.  We are up over $100,000 on CMG from entries that began in Jan 2018, when CMG was $300 and we're still in the position because we took wins off the table and now we're rolling our short-call losses and covering with the new $700/800 spread but it's not an entry position – it's a buffer against the 15 short Jan $740 calls burning us and then we're selling the puts to offset the calls but again, if we didn't owe the short callers $106,000 that we were trying to avoid paying (and maybe making some money), we would not be messing around with this from scratch.

Now AAPL, on the other hand, is still very undervalued at $203 and, unlike CMG, I'm NOT worried about AAPL falling 25% to $150 so, with AAPL, I would confidently take the following:

  • Sell 10 AAPL June 2021 $165 puts for $12 ($12,000) 
  • Buy 20 AAPL June 2021 $180 calls for $41 ($41,000) 
  • Sell 20 AAPL June 2021 $225 calls for $20 ($20,000) 
  • Sell 5 AAPL Sept $205 calls for $9 ($4,500) 

Here we're spending net $4,500 on the $90,000 spread that's $40,000 in the money so no big deal if you lose a bit to the short callers and, if AAPL behaves and rises slowly, you have 718 days to sell and the Sep short calls used 81 so 7 more sales like that can drop another $31,500 in your pockets while you wait to see if you make $85,500 (1,900%).  Margin on the short puts is only $16,500ish (ordinary) so it's great if you have PM.  

I don't see the point in messing around with risky trades when trades like that are just sitting around!

FCX/Batman – They lowered outlook for Q2 as they expected $2.94 avg selling prices and got $2.77 so revenues are down $75M and now they will lose 0.05 vs +0.09 expected but I think that's already baked in so it's really a question of whether or not it gets back to $3 moving forward.  

Cuba/StJ – Good point on the consistency but that doesn't mean we should conduct poor policy to be consistent.  I'm just happy on those rare occasions when idiocy doesn't win.

Getting a bit of a fade on the indexes – we'll see what sticks.