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.

Selling a put spread on $AAPL

I've been playing around the last few years on option plays.  I'll admit, I haven't spent a lot of time on terminology, so there are better places to find out what an Iron Condor is, and other lingo.


Still, I think that you can profit from this kind of trading.  I have, although I generate enough losses to make me wonder if it can be worthwhile over time.  I still think the answer is yes, but like any other kind of trading, it's probably better as entertainment than a real moneymaker.


Others may disagree with any part of that statement.


PUT SPREADS ON APPLE $AAPL


I put together a simple put spread on $AAPL.  With the stock price around $130, I sold the $125 May 17 put for $2.90 and bought the $115 put for $0.96.  If the stock is over $125 upon expiration, I keep the entire difference of $1.96 per option, (since options are for blocks of 100 shares, that's $196.)


It seems like a decent trade, a high probability of success.  The problem with this strategy is lousy risk/reward ratio.  If $AAPL price falls to $115, I lose the entire spread of $1,000 (less the $196.)  You can see why some people this isn't smart.  I can agree with that. You need a lot of wins to make up for a few really bad losses. 


I've blown up sometimes using these on short durations.  You can make good returns with weekly put or call spreads but if you are wrong, you can completely blow up your account.  So, I am stretching the time frame by going all the way out to May. 


If I get lucky and get some positive movement, I'll close the position early with a win.


I'll try to let you know how it works out.