Bull Put Spreads in AAPL

[Steven Place]

AAPL is in a sloppy continuation pattern, but while the rest of the market is weak it stubbornly stays above 100. This is good relative strength and points to an impending breakout.

Because it’s “sloppy” and breakouts have had a higher failure rate, I’m going to pick up bull put spreads.

I was going to go with Oct options but those are too close and don’t afford me good risk reward. So I’m going to go to November with the understanding that this has earnings with it, and I will exit before that time.

Sell to open HALF SIZE AAPL Nov 95/90 bull put spreads for 0.95

ADD to the trade at 1.25

BUY TO CLOSE at 0.40 and try to REOPEN at 0.95

[Christopher ODonnell]

Dear Steve,

What is meant by the term “Half Size” in the description of your trade?

Regards,
Christopher

[Steven Place]

Chris-

It means don’t put on a full size position. This is so we can add to the trade if AAPL pulls back a bit more.

[Steven Place]

Adding 2nd round here:

Sell to open AAPL 95/90 bull put spread at 1.47

Buy to close this half at 1.00

[Steven Place]

AAPL gapping up nicely here, going to close out that 2nd half at 0.95.

[Steven Place]

Will resell that half at 1.50 if we see another pullback.

[Steven Place]

I never added that second round at 1.50, but am going to close out the first half as we are heading into earnings:

Buy to close AAPL Nov 95/90 bull put spread @0.98

[Author]

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