Tuesday, February 21, 2017

A Bullish Option Spread on $AAPL

I have a long term put option on Apple, but since I have been watching it closely, I saw that it had been upgraded this morning.  The stock seemed to be steady, so I thought it might be good to put on a very short term bullish spread on.  I had some cash available from my winning $YELP spread that expired on Friday.

I sold a put spread (which is bullish).

Sold the $135 weekly put for this Friday for 40 cents
Bought the $132 strike weekly put also for this Friday for 9 cents.  The underlying stock was trading around $136.20 at the time.

If this works, that is, if $AAPL stays over $135 through close on Friday, I'll pick up the whole 31 cents (that is, $31 per option.)  The stock closed at $136.69, and I am already in the black. 

It's probably not smart to trade such short duration, I don't really have much chance of picking up much of the implied volatility, but it's a straight directional bet that the stock won't go down, or go down very much in a short time frame.

I'd like to update my position on the trades I made last week.  I have two bullish bets on $UVXY, short a $19 call and a $21 call.  The $21 looks OK, $UVXY closed at $20.69, that would pay off if it stays here.  The $19 is losing at this point, but $UVXY can fall quickly, so I will hang on to it for a few days.  Of course, it can also spike, but I have offsetting long calls at higher prices to give me some comfort.

Enjoy trading.

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