Bought AAPL May 175 calls @ 5.45 – high risk earnings trade

Apple Inc. (AAPL) is a stock with a lot of personality. Through earnings it did exactly what it does many times when it gives a low guidance and solid results which is zig-zags up and down. Up 5% then down 5%. All the Apple traders are saying “oh, I’m buying up on the dip!!!”. Is this true? Personally I think Apple might initially fall on thursday morning, but rebound and rebound hard and keep moving up unless the company shows weakness in publicity. I think AAPL buying up a new tech company is great. We definitely need some Steve Job speeches. One blog poster off made a good point, what happened to the iPod and iPhone sales? The reports scream mac computer sales which is extremely positive in a dead computer market, but did the iPods stop selling? Anyway. If AAPL reports good earnings it usually moves up into the upside through into June then with the iPhone 2 annoucement should continue. Yes, are markets are in turmoil right now, but AAPL is selling its products which means people do have money oh and did I mention everyone is getting their refunds back from the IRS. Yes, spending is about to start and the new iPhones timing is great for people that just got back $600-1200 plus their normal refund.

I’m highly confident in this small $500 option trade going through earnings. My goal is to be out Friday. If apple continues to fall I better take my loss ASAP becase then big guys are selling in which they know more then us.

My trade:
4/23/2008 3:51:06 PM (ET):
Description: AAPL MAY 175 Call
Stock: AAPL at 162.48
Action: Bought To Open
Quantity: 1 contract(s)
Price: $5.40
Commission: $14.95
Reg Fees: $0.00
Net Amt: $554.95

Plan to sell at $8-15

6 responses

  1. I’m looking to buy back AAPL soon. I’m seeing the market going down or consolidating for a few days. AH AAPL was all over the place and in the end not much changed from the regular close.

    April 23, 2008 at 10:49 pm

  2. good luck. I was thinking about a similar trade but backed out late today. I may buy tommorow as stock fell after hours. I may go for sep calls to cater for possible iPhone delays and more fed cuts.

    Great blog as well. Adding to my reading list.


    April 24, 2008 at 2:05 am

  3. moom,

    You’re right. It did move up and down just as I figured it would. Investors/company must be confident since it is positive today after earnings. I don’t think a pullback is happening anytime soon. Maybe a dip or some big moving force in the market. My options though fell! weird huh? I’m 6 pts out of the money and my option is $4. that makes……..actually i guess it makes sense, but doesn’t on a $169 stock my option in my opinion should be trading 6-7 dollars.

    April 24, 2008 at 9:05 pm

  4. toosweet

    i dont understand all of this trade and stocks and all the rest of the stuff u talk about in your article…how do i get myself educated..i too would like to invest but wouldnt know where to put my dollar…

    May 6, 2008 at 5:24 am

  5. toosweet,

    read books. this is how you get educated and of course interaction by getting yourself wet + losing real money (if you dare to)

    May 6, 2008 at 3:05 pm

  6. Hi! I was surfing and found your blog post… nice! I love your blog. 🙂 Cheers! Sandra. R.

    September 10, 2009 at 1:13 pm

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