New AAPL Trade Ideas: Calendar and Straddle Spreads

• stevenplace
• January 5th, 2009

New AAPL trade idea: AAPL is up on the announcement that Steve Jobs is immortal. This looks like a good sell the news scenario, so here’s a couple ideas.

Sell -1 AAPL 95 Straddle 8.05.

That puts your breakeven around 87 and 103 in a couple of weeks. This play is assuming that the stock will chop around and won’t have a clear trend for a while. It’s not full-on bearish but I like the play. There is unlimited risk here so you might want to be careful and use proper risk management.

Buy 1 AAPL 90 Put Calendar 3.88
This spread is a little more skewed bearish with a max gain at 90. The breakevens are a little tighter than the straddle but there is limited risk since it is a calendar spread.

I think on a technical level that the gap will fill sometime this week and we shouldn’t see a whole lot of conviction. This stock can be volatile so know exactly how much you’re willing to lose.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Tickers: aapl

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