General Options Blog

AAPL Which Way Will It Go George?

AAPL reports earnings after the bell tomorrow and it is one of the most anticipated events each earnings season.  From a strictly out of the money, close to expiration, option perspective AAPL has been a loser over the long haul.  The main reason being the options price in a big move and this move usually does not happen,  which means I likely will not play AAPL options for earnings, although I may get into a trade the day before and sell on Thursday for the premium build up near the close.  Option prices are showing a market that is anticipating another volatile post earnings session for AAPL, which means only one thing....

AAPL, like NFLX ( a stock that has a similar out of the money price build up), will ultimately trade no more than 2% in either direction. This will kill all the out of the money speculators who are paying BMW type money for Ford Pinto type quality.  Look at some of the strikes - the $660 strike is at $1.00.  That is a full 10% move.  The $540 strike puts are going for $.85.  The odds are against either type of move, however where I forced to trade AAPL for earnings I would get equally insane and go even farther out of the money.  If AAPL doesn't make my anticipated 2% move in either direction, I think it will pull a 15% move which would make those out of the money speculators very happy.  If you share my view the $680 strike closed at $.30 and would be worth $10 if we get a 15% move from AAPL.  The $520 puts are also going for $.30.  CMG's 20%+ slide showed on Thursday night and Friday that anything is possible these days when it comes to earnings reports.

I may change my mind with AAPL tomorrow and take a small position in both the puts and calls, essentially a strangle.

The $680 calls for $.30 -  8 contracts = cost $240 (+ commission)

The $520 puts for $.30 - 8 contracts  = cost $240 (+ commission)

With every analyst and his brother maintaining buy ratings on AAPL and $1,000+ price targets I do think the stock will head higher.  It's done nothing but go up since late 2008.  Heading into earnings back then I was buying up $90 calls.  To think less than 4 years later I am looking at the $680 calls.  LEAPS!

The answer to the title of my post is quite simple....we don't care.  We don't care where AAPL goes when we have a strangle.  That is the luxury of trading stock options.  All we need is a big move.

PCLN Technical Analysis in HD

This post is available to all members of the site, including Bronze (i.e. "free") members. Please sign in or sign up now FREE to view the rest of this post and watch the HD video. Please find the video at the bottom of the post! (NASDAQPCLN) is an American company and a commercial website that helps users obtain discount rates for travel-related purchases such as airline tickets and hotel stays. The company is not a direct supplier of these services; instead it facilitates the provision of travel services by its suppliers to its customers. It is headquartered in NorwalkConnecticutUnited States.

Priceline was the brainchild of digital entrepreneurJay S. Walker. The company's origins were closely tied with Walker's company Walker Digital. Hong Kong company Cheung Kong Holdings later purchased a significant portion of Priceline's stock.


UPB Earnings Video – $AAPL, $NFLX, $CMG, $CAKE, $NFLX, $BWLD, $AMZN, $FB, $ZNGA

UPB Earnings Video - $AAPL, $NFLX, $CMG, $CAKE, $NFLX, $BWLD, $AMZN, $FB, $ZNGA

It is a big earnings week.  We have AAPL and NFLX on Tuesday.  FB and AMZN on Thursday.  In between we have CAT, ZNGA, XOM, LVS, WFM, XOm to name a few.  Should be another great earnings week.  Last week CMG brought home the bacon as the puts soared over 10,000% for many of the strikes and over 20,000% on a few of the strikes.  Pennies into dollars, or in the case of one strike $.15 into $36.10.  Let's see if we get another big move this week.







Live! The Week Ahead For Option Traders – Host UPB



This Sunday at 10:30PM est I will be hosting a walk through of the week ahead.  We had a great earnings week this past week including a 10,000%+ move for CMG puts holders.   I covered all the major movers and potential trades last weekend and I will do the same this Sunday.  Join me at 10:30PM for an interactive look at the week ahead.  Eanrings season is in full swing.  I will go over all the major companies that are reporting earnings and how I intend to position myself for a profitable trade.  I had several great trades presented in my last event.  Don't miss this one.

This is the link for the event: