I am finding it difficult to find decent entry points for long term holdings at these levels. I believe we have some upward momentum building so I initiated two aggressive option plays this morning.
First I bought 10 Sept 270 AAPL Calls at $1.98 and sold 10 Sept 280 Calls at .25 for a net cost of $1,730.00
Apple has faced serious resistance at the 265-266 level and this morning we have broken past this level at high volume. The real test will be when the fade comes later in the day. Obviously this trade has a very short leash with expiration on Friday and decay eating at my profits. If the market rally continues this week (which I think it will as next resistance point is at SPY 1130) this trade should be profitable.
Second I bought 10 Oct 65 RIG calls at $1.36 for a net cost of $1,360.00
Rig has been forming a bottom since early June and is approaching its resistance in the $59 area. If it breaks through this level it could make a run at $70-$72.50 range. This is speculative play as there is still a considerable amount of uncertainty in this sector. With mid terms approaching, look for Dem’s to concede on the drilling moratorium. It’s about Jobs now, not the environment.
I will keep you posted on profit and loss for these two plays.