Another Option Monday and I am sticking with what has been working. Last week I purchased 5 AAPL Nov 270 Calls at $24.45 per and 5 AAPL Nov 280 Calls at $17.25 per. To date the trade has been fairly profitable (I’m up nearly $4,000) and I think it has considerable more room to run. Every day we are greeted with more good news- Target, Wal-Mart, Verizon, China Telecom, Apple TV, etc. Every day we get more and more analysts upgrades- the new median target price is $352, everyone is expecting a blowout quarter. This seems like easy money. That is what is starting to worry me.
AAPL reports earnings on the 18th and anything less than a blowout quarter will cause a profit taking selloff. To be clear, I think AAPL is going to post a blowout quarter. This is a company that is firing on all cylinders. The China roll out went better than expected. This could be its 20 Billion dollar quarter and for the sake of my call options, it better be.
So my plan for the week is to sit on these options. I will take a profit if AAPL hits $305 before earnings- that is very feasible. There could be a lot of managers playing catch up come Monday. Other than that I intend on holding these past earnings and adding to my holdings on any weakness. The fundamentals are there, the momentum is there, the technicals are there, let’s hope the market agrees with me.
Wish me luck.