Sunday, January 2, 2011

Option Mondays: GM and AAPL

I have gotten away from the T20YM Option Monday report over the last few months. The main reason was that most of my trading capital was wiped out with the GOOG debacle. I have tightened my belt and scratched back to a place where I feel comfortable dipping my toes in the Options Market again.

Last month I was focused entirely on the Financial Services/Banking recovery. I was lucky enough to buy 11.50 LEAP on BAC and took a handsome profit on its run up. I was also in early on HBAN’s modest recovery. JPM and WFC both worked nicely and I turned these trades into 60%-70% gains. I am out of the banking sector for the time being, turning my attention some more current market movers.

General Motors: 10 GM Jan 22 '11 $38 Call at .15c per and 10 GM Feb 19 '11 $35 Call at $1.75 per.

It’s not often when a iconic American company is initiated at a buy by 7 different firms on the same day. Not only that the median price target was set at $45. This is the type catalysts that will drive a stock price up for a few weeks- especially at year end for MM window dressing.  I expect the stock to run up again next week on heavy volume. I will hold the Jan 38’s until week end and the Feb 35’s into Feb.

Apple Corporation: 10 AAPL JAN 22-11 $310.00 CALL at $17.30 per.

Unless there is a complete market breakdown, I suspect AAPL will have a substantial run up into next earnings report on Jan 18th. Considering we have FIVE straight days of POMO starting on Monday, I don’t think we will be breaking down. This will be the biggest quarter in AAPl’s history. Additionally, we have the Verizon catalyst that should come early/mid next week. I believe most of this is priced in, but it should have another spark for the stock. Other than the share price, AAPL is unbelievably cheap. I will add some Jan 330’s if we move higher on Monday and Tuesday. I plan on selling at least half the position before earnings to avoid Premium Suck and profit taking.

I will have my eye on a few small cap precious metal companies as well. Looking to add LEAPS on a few different names. Will post updates as they arrive.

Happy New Year…

Craig Mack


  1. What do you think about shorting the GLD? There seems to be a lot of activity at the Feb 135 put. And it doesn't look like covered call writing.


  2. correction Craig, I meant to say Mar 135 puts.

  3. I'm usually not fond of shorting high momentum stocks/commodities. I agree that GLD looks toppy, but this could be a minor correction. Furthermore,there are millions of things that can cause GLD to gap higher... I just dont think the risk/reward is worthwhile.

    GLD still wants to go up- eventually it will.

  4. Why all the talk about general motors ford is by far the better of the two general motors is not even close to ford.