Wednesday, September 22, 2010

AAPL Short Call Spread

I just initiated a 5-lot short call spread on AAPL OCT 300/310 for a $1.62 credit. I am not assuming max loss of $8.38 on the spread. I will watch this closely and if it breaks the upper trend line I will consider getting out. My next point to watch is the $300 level. It just seems like this has a date with destiny at $300 but I would expect a stall there as its a huge psychological number and you could have got in this month alone at $250 or less. If I'm wrong I'm out. Using an arbitrary number and assuming it does break $300 next week, I'm looking at a roughly $1000 loss. My max gain is (5) 1.62 = $810 so I'm risking a little more than 1:1.

1 comment:

  1. I didn't post at the time but I ended up closing this trade out for a ($700) loss two days later when it closed above the uptrend. Looks like I got shaken out but that was my first exit point. I updated the this original post with the chart.

    Ironically enough, I actually went long via a ratio spread after exiting that trade and will do a new post on that.