Made any money trading Apple options?
It’s not easy. Apple gets so much media attention that it will really mess with your thinking. One talking head loves it and is buying it, another thinks the company is dead and slowly going away. As each one of them is interviewed on TV, the price jumps up or falls down, and the casual trader gets whipsawed. It took me a long time to figure out how to trade Apple and I’ve made $6000 so far this year by using a very simple system.
“Patience produces profits” – wise words of a stockbroker friend of mine years ago. I apply those words to trading Apple. I’ve tried many techniques to trade the moves, and have decided that, for most people, it’s just not possible. You have to get so many things right and with a stock in the $500 range, the numbers are just too big. Here is my simple technique that is working consistently in Apple’s current bull market. >>>> I wait, patiently, for the stock to fall by at least $10 before I even pay attention. Then, I will place an order to sell a naked put at $5, but I place that order when the option is around half that price so that it has to double before I get the sale. (Apple has to fall even more before I enter the trade.)
On December 31 of last year, Apple closed at $561. On January 3, it was trading below $550 so I placed an order to sell one 535 put at $5. At some point during the day, it was filled. On January 6, it was trading below 535, so I sold a 530 put for $5. Two days later, on the 8th, that 530 put was closed for 24 cents, resulting in a profit of about $475. On the 10th, the 535 was rolled out to the next week for $5.75. We kept the original $500, added the $575 so we had a closed profit of $475, plus $500, plus $575. The 535 put was closed on January 17th for 5 cents. Two option positions opened, one closed quickly, another rolled for one week and then closed, total time for the trade 14 days – total profit well over $1500. More examples to come.
Stay Optioned, My Friend.