It seems that Apple Computer, Inc. has become one of my favorite companies to trade. So far I have successfully managed to close 2 good trades (here and here). The plan is to repeat AAPL trade yet another time.
My confidence in Apple Computer shot up this weekend when I saw Parallels virtual machine working on a Mac. Simply impressive. I think with Parallels Mac is one of the better windows PC out there.
So, inspite of Apple Computer's share price above $90 I am selling more put option contracts in AAPL with Dec 2006 expiration date.
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5 comments:
halo,
Being a stock market newbie, -especialy at US market, i think i understand your movements pretty well.
But I m wondering about apple, if the final Q is better than expected, why not keep growing even more through January?
Anyway just wondering, great blog btw!
arkas,
I've been long on AAPL for 26 months. At times it's been a wild ride, but profitable. From a stock point of view you need to consider two things:
(1) The difference between a trader and an investor. Oh, and options too. :-) An investor has a longer horizon and holds a position much longer than either a trader or someone who uses options.
(2) The history of AAPL. At least, the recent history! :-) The last few Januarys have seen MWSF (Mac World San Francisco), followed by a quarterly report the includes the holidays.
AAPL is a favorite of many. It's also one of those stocks that you buy on the rumor and sell on the announcement. Here's what's happened the last few years:
(a) Many mutual fund managers buy AAPL the last week of December. This way they can list them in their portfolio at year end.
(b) MWSF brings announcements of new products, sometimes surprising. And sometimes disappointing.
(c) The fiscal Q1 call has AAPL reporting record sales, and usually a more pessimistic forward guidance for the next quarter than most analysts were expecting.
(d) People selling AAPL in January don't pay taxes on that sale until a year later.
All told, AAPL has seen major dips in January. Sometimes, like this year, it takes them 6 months to recoup. But they always do!
The question next month is this: With a potential of iPhone and iTV in the calendar Q1, along with everyone projecting record sales again... is this the time AAPL doesn't have a major pullback?
Dave
Again, I've been long on AAPL over 2 years now. Oh, and I'm not the author either.
I have posted on this blog before about tax consequences of being a trader. Maybe, there are none for retirement accounts. I am not a CPA. But I am sure the commissions eat up returns. I have been in AAPL since 2003 sub $10.00 holding 5000 shares. I have had moments of selling, but the technicals and fundamentals appear to strong for the long run. I held through this year when the price dropped severely.
I suspect my return is nearly 10 fold at this time. I also own CSRSX a REIT fund since 2003. That is up nearly 2.5 times since I purchased. Also, own DHR bought just under $40.00, own 1000 shares and now trading low $70.00, bought PRCGX and DODFX both up over 50%.
What I wonder is, with your capital base why are you trading and not buying for the long-term. Is there an advantage you see in selling puts. If you like the stock but want more diversification, what about creating a synthetic option spread that behave more like the underlying security.
I hope the strategy you're employing works for you, it just sounds like the brokers making lots of money on all the transactions. I mentioned I use Tradestation, I employ options for asset protections against my portfolio. They charge me $1.00 per contract and equities cost is .01 per share for the first 500 and .006 per share for the balance. They offer great charting and tool sets.
Anyway, I admire your ambitions and hope you achieve your goal. But would you consider holding assets for a longer time frame? It has really worked for my wife and I. we started with $40K in late 2000 and now have reached the 7 figure mark because of our buy/hold strategy.
BOL and great blog
Great advise guys. The main reason for me to start this blog was to be more discplined and learn. I will have to do a post on some of the questions that you raised here as many of the readers have also emailed me with it.
great blog, I love options and I am getting more and more in depth with them every day as far as understanding their complexity. thanks for going in depth with each trade and showing the P/L of the trade as well. I'll continue reading. Be sure to check out my day trading blog as well.
-CalTrader
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