Where have I been?
Last week, I continued with my AAPL trades. Problem is, I am on the wrong side of them. Currently I control 35 Oct 16 290 AAPL calls at roughly 5.90 an option. I am clearly going to take a bath- the question is ‘how much’? The stock has become irrational. The charts have become bearish. Yet the story and the fundamentals remain intact. AAPL is trading at cash adjusted 14x future earnings… The Forward PEG ratio is >1. The expansion into foreign markets is ahead of schedule. My guess is Big Money is just profit taking, shaking out the trees, and setting up for another huge profit after earnings (Oct 18th).
Problem is, time is not on my side. The market can remain irrational longer than I can remain solvent. The chart is getting uglier and uglier…
With theta eating my aaples, I figure this trade has 3-4 more days MAX. On any signs of weakness, I am out. On any spike I am unloading half the position. This one did not go my way, so I am going to take my medicine and move on. I just hope it doesn’t kill the patient.
Any thoughts on where we are heading in the next week? I would love to hear any rational thoughts.