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Investing Any options traders here?
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juice Offline
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Post: #4
RE: Any options traders here?
(12-06-2012 09:03 PM)defguy Wrote:  I trade AApl. Its expensive but the markets are really efficient and so that is reflected in the price. I typically like to buy in the money calls (always bullish on Apple it has 50 billion in cash) at around 8.00-10.00 1 to 2 months out and sell it when the option makes a 3 point movement in my direction. The stock will move sometimes 30 basis points in 1 day. I dont have it down to a science but with the volatility and volume and taking small but reasonable profits it seems to work. Hedging such as straddles and strangles is often recommended but I think buying in the money calls with a 1 - 2 month out expiration is safe enough bet. Any suggestions you would like to add that could help my strategy would be great.

Well the first thing you should look at is the term structure of implied volatility and aim at buying the cheapest. Is there a time when you like to buy the ITM calls such as dips, support levels, etc? I like selling puts over buying calls since time decay can work in my favor and I can profit even if there isn't any directional movement.

There is another strategy that you may consider trying. You can buy ITM LEAPS and then finance those by selling front month calls. It's similar to a covered call strategy but the LEAP acts as your stock (so much cheaper than owning 100 shares of AAPL). Here's an example:

+1 AAPL JAN 14 400 Call at $16,645 (81 delta)
-1 AAPL JAN 13 630 Call at $460

So, the JAN 14 400 Call costs $16,645 but you're effectively controlling 81 shares of AAPL. If doing the same with stock and using today's close, $547.24, that would cost $44,326.44. Now, the whole idea is to sell a call against the position in order to reduce your cost basis. The call being sold is about +15% from the current stock price. The first month, the position would cost $16,645 - $460 = $16,185. Doing this every month would reduce the cost basis by $460 x 12 = $5,520 so down to $11,125. Of course, this is just an example but I hope it conveys the idea accurately. Let me know if you have questions

Blog: Options Trading
12-07-2012 02:13 AM
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Messages In This Thread
Any options traders here? - juice - 12-06-2012, 08:05 PM
RE: Any options traders here? - defguy - 12-06-2012, 09:03 PM
RE: Any options traders here? - juice - 12-07-2012 02:13 AM
RE: Any options traders here? - BIGINJAPAN - 12-07-2012, 02:44 AM
RE: Any options traders here? - juice - 12-07-2012, 12:55 PM
RE: Any options traders here? - HiFlo - 12-06-2012, 10:30 PM
RE: Any options traders here? - juice - 12-07-2012, 02:14 AM
RE: Any options traders here? - Spike - 12-07-2012, 04:06 AM
RE: Any options traders here? - juice - 12-07-2012, 12:56 PM
RE: Any options traders here? - BIGINJAPAN - 12-07-2012, 02:45 PM
RE: Any options traders here? - RichieP - 12-07-2012, 05:43 PM
RE: Any options traders here? - BIGINJAPAN - 12-07-2012, 09:53 PM
RE: Any options traders here? - juice - 12-08-2012, 12:32 AM
RE: Any options traders here? - RichieP - 12-08-2012, 02:26 AM
RE: Any options traders here? - bhawthorne - 12-08-2012, 11:59 AM
RE: Any options traders here? - juice - 12-09-2012, 04:41 PM
RE: Any options traders here? - sheesh - 12-09-2012, 09:21 AM
RE: Any options traders here? - Seadog - 12-12-2012, 04:59 AM
RE: Any options traders here? - BIGINJAPAN - 12-09-2012, 01:42 PM
RE: Any options traders here? - juice - 12-09-2012, 04:43 PM
RE: Any options traders here? - defguy - 12-10-2012, 12:05 PM
RE: Any options traders here? - bhawthorne - 12-11-2012, 08:39 AM
RE: Any options traders here? - sheesh - 12-12-2012, 05:37 AM
RE: Any options traders here? - BIGINJAPAN - 12-12-2012, 12:04 PM
RE: Any options traders here? - juice - 12-12-2012, 11:38 PM
RE: Any options traders here? - BIGINJAPAN - 12-13-2012, 12:16 AM
RE: Any options traders here? - Rocket13 - 12-13-2012, 12:20 AM
RE: Any options traders here? - BIGINJAPAN - 12-13-2012, 12:38 PM
RE: Any options traders here? - sheesh - 12-13-2012, 08:30 AM
RE: Any options traders here? - ElJefe - 12-14-2012, 06:30 AM
RE: Any options traders here? - BIGINJAPAN - 12-14-2012, 01:21 PM
RE: Any options traders here? - BIGINJAPAN - 12-14-2012, 02:46 PM
RE: Any options traders here? - juice - 12-20-2012, 12:19 PM
RE: Any options traders here? - bhawthorne - 12-20-2012, 01:05 PM
RE: Any options traders here? - BIGINJAPAN - 12-14-2012, 04:05 PM
RE: Any options traders here? - BIGINJAPAN - 12-14-2012, 04:06 PM
RE: Any options traders here? - defguy - 12-22-2012, 02:38 PM
RE: Any options traders here? - Sleazy - 10-12-2018, 04:59 PM
RE: Any options traders here? - Sleazy - 10-12-2018, 05:09 PM
RE: Any options traders here? - Cortés - 10-12-2018, 05:07 PM
RE: Any options traders here? - tomtud - 10-12-2018, 06:01 PM
RE: Any options traders here? - tomtud - 10-16-2018, 07:14 AM
RE: Any options traders here? - Sleazy - 11-12-2018, 05:04 PM
RE: Any options traders here? - Sleazy - 11-13-2018, 05:21 PM
RE: Any options traders here? - Sleazy - 11-19-2018, 08:38 PM
RE: Any options traders here? - Bacchus - 11-20-2018, 12:04 AM
RE: Any options traders here? - Sleazy - 11-20-2018, 10:04 AM
RE: Any options traders here? - Captain Gh - 11-20-2018, 01:06 AM
RE: Any options traders here? - Sleazy - 11-20-2018, 10:08 AM
RE: Any options traders here? - Captain Gh - 11-20-2018, 11:04 AM
RE: Any options traders here? - Sleazy - 11-20-2018, 11:31 AM
RE: Any options traders here? - tomtud - 11-20-2018, 02:47 PM
RE: Any options traders here? - tomtud - 11-20-2018, 04:40 PM

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