Following the Trade – AAPL Trade Adjustment on Friday 2/15

I made another adjustement to the AAPL trade I currently have on.  I will provide a quick recap of risk profiles and charts and I will leave it to the reader to click on the link to read more in detail on why I went long AAPL starting 2/5.  I have made 2 adjustments to this trade as of 2/15.

As stated in my first post, “Utilizing Market Comments from Other Traders“, I went long AAPL with options in the form of a Broken Wing Butterfly, below are pictures of my order entry and risk profile:

Order entry:

aapl_20130206

Risk profile:

aapl_20130206b

On 2/11 I made an adjustment (via 460 Put Calendar) to protect from downside action.  More into the analysis of the why and what I was looking at can be found in this post, “Trade Adjustment – AAPL“.  Below is the order entry with the addition of the risk profile with the adjustment:

Order entry:

aapl_0212b

Risk profile:

aapl_0212c

**Now for the new trade and adjustment made. **

I rolled that 460 Put Calendar in the afternoon on Friday.  The hindsight trade would have been to leave it on for what turned out to be a perfect pin at 460 and max profits achieved.  The way I saw it though and playing this Calendar Spread was that I had risk to the upside on the Put Calendar trade if AAPL were to move higher.  Below is the 15min chart of AAPL and where I rolled the position:

aapl_0215

My order was to close out the 460 Put Calendar and roll to next weeks 440 Put Calendar.  On the daily AAPL is still in a long-term downtrend, but also in a low volume pullback on that recent break above 460:

aapl_0215a

Needless to say I see AAPL as a tough trade.  I wasn’t happy with the 450 Put Calendar as a hedge against the current long Broken Wing Butterfly so I went with next week’s 440 Put Calendar, in case we see that whoosh below 450.  I then believe 440 will hold on a price and time to expiration basis. Below is my order entry:

aapl_0215c

I executed this in one order and rolled this position for a 2.40 credit. Broken down:

  • closed the 460 Put Calendar (original debit 1.60) at 4.09 (+$249.00, +155.6%)
  • opened the 440 Put Calendar at 1.69
  • overall a positive gain of $80 with no more risk in the Put Calendar hedge and reducing my cost basis of the original trade of the Call Broken Wing Butterfly from 4.25 to 3.45.

Below is my new risk profile going into Friday expiration 2/22:

aapl_0215d

Overall I am comfortable with my adjustment allowing for downside protection in case we see that drop in AAPL.  The downside is where my risk in the combined trade is and this is what I am looking to protect.

Comments are closed.

Following the Trade – AAPL Trade Adjustment on Friday 2/15

I made another adjustement to the AAPL trade I currently have on.  I will provide a quick recap of risk profiles and charts and I will leave it to the reader to click on the link to read more in detail on why I went long AAPL starting 2/5.  I have made 2 adjustments to this trade as of 2/15.

As stated in my first post, “Utilizing Market Comments from Other Traders“, I went long AAPL with options in the form of a Broken Wing Butterfly, below are pictures of my order entry and risk profile:

Order entry:

aapl_20130206

Risk profile:

aapl_20130206b

On 2/11 I made an adjustment (via 460 Put Calendar) to protect from downside action.  More into the analysis of the why and what I was looking at can be found in this post, “Trade Adjustment – AAPL“.  Below is the order entry with the addition of the risk profile with the adjustment:

Order entry:

aapl_0212b

Risk profile:

aapl_0212c

**Now for the new trade and adjustment made. **

I rolled that 460 Put Calendar in the afternoon on Friday.  The hindsight trade would have been to leave it on for what turned out to be a perfect pin at 460 and max profits achieved.  The way I saw it though and playing this Calendar Spread was that I had risk to the upside on the Put Calendar trade if AAPL were to move higher.  Below is the 15min chart of AAPL and where I rolled the position:

aapl_0215

My order was to close out the 460 Put Calendar and roll to next weeks 440 Put Calendar.  On the daily AAPL is still in a long-term downtrend, but also in a low volume pullback on that recent break above 460:

aapl_0215a

Needless to say I see AAPL as a tough trade.  I wasn’t happy with the 450 Put Calendar as a hedge against the current long Broken Wing Butterfly so I went with next week’s 440 Put Calendar, in case we see that whoosh below 450.  I then believe 440 will hold on a price and time to expiration basis. Below is my order entry:

aapl_0215c

I executed this in one order and rolled this position for a 2.40 credit. Broken down:

  • closed the 460 Put Calendar (original debit 1.60) at 4.09 (+$249.00, +155.6%)
  • opened the 440 Put Calendar at 1.69
  • overall a positive gain of $80 with no more risk in the Put Calendar hedge and reducing my cost basis of the original trade of the Call Broken Wing Butterfly from 4.25 to 3.45.

Below is my new risk profile going into Friday expiration 2/22:

aapl_0215d

Overall I am comfortable with my adjustment allowing for downside protection in case we see that drop in AAPL.  The downside is where my risk in the combined trade is and this is what I am looking to protect.

Comments are closed.