Now that earnings are behind us, the question is what to do with AAPL: buy, hold, or sell? Prior to the earnings report, I took a full position in the April 2015 $85 calls for $12.75. The reason I chose the so far ITM was because I wanted to protect myself in case AAPL would sell off after earnings.
After today’s market sell-off, the VIX rose a mammoth 35% and the VXX rose 10%. Two major global issues occurred today. The Malaysian Airline plane that was shot down, killing all on board, worried traders. In addition, Israel began a ground attack on Gaza. All of this led to the S&P 500 having its first down 1% in over 60 trading days and has given us another geopolitical crisis. What now?
AAPL seems to have a date with the $100 level and it seems like it will get to that level within the next few months from now, in the Fall of 2014. The problem with playing weekly options is that the weeklies are well known to be premium killers, therefore, one strategy to play AAPL is to purchase call calendars in which you buy longer term calls, preferably January, and then, every week sell weekly calls to finance the
purchase.
