Wednesday: An AAPL a Day Keeps the Bears at Bay

$11.5 Billion Dollars.

Or, what's known as a slow quarter for Apple (AAPL), who beat lowered expectations (they guided down $9Bn for the year back in January) on $58Bn in sales, which were down $3Bn from last year.  So we have $3Bn less Sales and $2.3Bn less Net Income and the stock is up 33% from last April.  

Apple is a bit different from most stocks as it was stupidly cheap last April and we have a substantial long on them in our Long-Term Portfolio and our Options Opportunity Portfolio and we even have short AAPL puts in the Short-Term Portfolio, where we sold the 2021 $170 puts for $22 back on November 20th, which was like getting $22,000 NOT to buy AAPL for $170 at this point, with Apple expected to open over $210 this morning.

We just reviewed the Options Opportunity Portfolio in the April 18th Morning Report and our AAPL trade at the time was net $38,525, up from a $12,500 entry back on Jan 3rd but we wanted to be a bit more conservative so we called for the following adjustment:

  • AAPL – There's no sense having $120 calls that are so deep in the money so we're going to cash those in for $85 ($85,000) and add 20 of the June 2021 $180 ($42)/220 ($23) bull call spreads at $19 ($38,000) and we'll roll our 10 short 2021 $185 calls at $36.50 ($36,500) to 10 short July $200 calls at $11 ($11,000) so we're taking net $21,500 off the table and we still have an $80,000 potential spread 1/2 covered by short calls. 

Now, had we left it alone, as of yesterday, the options spread looked like this:

AAPL Short Put


continue reading