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Archive for the ‘AAPL’ Category

A Remarkably Safe Way To Play The Apple Earnings Announcement

Tuesday, January 22nd, 2013

Apple announces earnings Wednesday after the close and I have come up with a strategy that looks like it can make a decent gain for the week (ranging from 5% to 15%) with almost no chance of incurring a loss. 

The big downside of the strategy is that it requires an investment of about $16,000.  I understand that many subscribers are looking for less costly option investments.

 However, if you can afford an investment of this size, check out the Seeking Alpha article I wrote just yesterday. 

Terry 

Here is the link – A Remarkably Safe Way To Play The Apple Earnings Announcement 

This is the third week in a row that I have offered a strategy centering on the unusually-high option prices in the series that expires just after an earnings announcement. 

The first play was for Wells Fargo – How to Play the Wells Fargo Earnings Announcement for Tomorrow.  This one gained 44% after commissions. 

The second play involved eBay – How to Play the EBAY Earnings Announcement.  I waited too long to close out my spreads this time around (many subscribers gained 24% or more).  But I did manage to make 11.6% after commissions, still not a bad week. 

I think this week’s earnings-announcement play is the safest one yet in spite of the high cost  requirement.  I am also sharing with paid subscribers a most promising play in Starbucks (SBUX).

Six consecutive successful Apple option plays, and more still to come?

Wednesday, January 2nd, 2013

Three weeks ago I wrote an article about how to play the unusual stock action pattern of Apple (AAPL). – Play Apple Volatility With A Unique Weekly Options Strategy

For some unclear reason (most likely options-related, at least to my way of thinking), AAPL tends to fall on Fridays, often quite dramatically, and to move higher on Mondays.

At that time, I suggested that buying at-the-money puts Thursday near the close (or shortly after the open on Friday) would often result in extraordinary gains if you sold the puts near the close on Friday.  For the past three weeks, this pattern has continued in spades.

The stock fell on Friday in those three weeks by $19.90, $2.40, and $5.47.  Since at at-the-money put with a single day of remaining life would cost about $4, your average gain over these three weeks works out to more than 150% per week.  During these three weeks, greater gains were possible by buying the puts before the close on Thursday rather than after the open on Friday (in the prior 12-week test, the stock often opened up a bit higher on Friday, suggesting that might be a better entry point).

The results for Mondays were not as dramatic, but still quite impressive.  Of course, buying an at-the-money call either Friday near the close or near the open on Monday would cost closer to $10 because there would be five trading days remaining rather than only one, so the initial cost of the option would be about double the amount required to buy puts in anticipation of the Friday drop.

Over the last three weeks, on Mondays, AAPL has moved higher by $9.04, $.84, and $22.58.  Substantial gains would have come your way in two of the three weeks with probably a break-even in the week when the stock budged up only $.84.

Will this Friday-Monday pattern continue?  No one knows, for sure.  My experience is that trading patterns identified by back-testing do not always hold up going forward.  But somehow this one seems different.  Until the pattern is broken, at least buying puts near the close on Thursday seems like a good bet.  Even if you lose the entire bet on occasion, there have been so many Fridays when the drop has been substantial, over time, the returns could have been extraordinary.

At heart, I am not an option buyer.  I prefer collecting decay from selling short-term options (using longer-term options as collateral rather than stock).  But for many months now, the daily and weekly fluctuations in AAPL have been considerably higher than the implied volatilities of the options would suggest.  As long as this pattern persists, buying AAPL options rather than selling them seems be in order, especially when there us some reason to believe that buying a put or call (rather than a straddle or strangle) gives you an edge.  The Friday-Monday phenomenon might just be the edge you need.

Invest in Yourself in 2013 (at the Lowest Rate Ever)

Monday, December 31st, 2012

To celebrate the coming of the New Year I am making the best offer to come on board that I have ever offered.  It is time limited.  Don’t miss out.

Invest in Yourself in 2013 (at the Lowest Rate Ever)

The presents are unwrapped.  The New Year is upon us.  Start it out right by doing something really good for yourself, and your loved ones. 

The beginning of the year is a traditional time for resolutions and goal-setting.  It is a perfect time to do some serious thinking about your financial future.

I believe that the best investment you can ever make is to invest in yourself, no matter what your financial situation might be.  Learning a stock option investment strategy is a low-cost way to do just that.

As our New Year’s gift to you, we are offering our service at the lowest price in the history of our company.      If you ever considered becoming a Terry’s Tips Insider, this would be the absolutely best time to do it.  Read on…

Don’t you owe it to yourself to learn a system that carries a very low risk and could gain 36% a year as many of our portfolios have done?

So what’s the investment?  I’m suggesting that you spend a small amount to get a copy of my 70-page (electronic) White Paper, and devote some serious early-2013 hours studying the material. 

And now for the Special Offer – If you make this investment in yourself by midnight, January 9, 2013, this is what happens:

For a one-time fee of only $39.95, you receive the White Paper (which normally costs $79.95 by itself), which explains my two favorite option strategies in detail, 20 “Lazy Way” companies with a minimum 100% gain in 2 years, mathematically guaranteed, if the stock stays flat or goes up, plus the following services :

1) Two free months of the Terry’s Tips Stock Options Tutorial Program, (a $49.90 value).  This consists of 14 individual electronic tutorials delivered one each day for two weeks, and weekly Saturday Reports which provide timely Market Reports, discussion of option strategies, updates and commentaries on 8 different actual option portfolios, and much more. 

2) Emailed Trade Alerts.  I will email you with any trades I make at the end of each trading day, so you can mirror them if you wish (or with our Premium Service, you will receive real-time Trade Alerts as they are made for even faster order placement or Auto-Trading with a broker).  These Trade Alerts cover all 8 portfolios we conduct.

3) If you choose to continue after two free months of the Options Tutorial Program, do nothing, and you’ll be billed at our discounted rate of $19.95 per month (rather than the regular $24.95 rate).

4) Access to the Insider’s Section of Terry’s Tips, where you will find many valuable articles about option trading, and several months of recent Saturday Reports and Trade Alerts.

5) A FREE special report “How We Made 100% on Apple in 2010-11 While AAPL Rose Only 25%”. This report is a good example of how our Shoot Strategy works for individual companies that you believe are headed higher.

With this one-time offer, you will receive all of these benefits for only $39.95, less than the price of the White Paper alone. I have never made an offer better than this in the twelve years I have published Terry’s Tips.  But you must order by midnight on January 9, 2013.  Click here, choose “White Paper with Insider Membership”, and enter Special Code 2013 (or 2013P for Premium Service – $79.95).

Investing in yourself is the most responsible New Year’s Resolution you could make for 2013.  I feel confident that this offer could be the best investment you ever make in yourself.

Happy New Year!  I hope 2013 is your most prosperous ever.  I look forward to helping you get 2013 started right by sharing this valuable investment information with you. 
Terry

P.S.  If you would have any questions about this offer or Terry’s Tips, please call Seth Allen, our Senior Vice President at 800-803-4595.  Or make this investment in yourself at the lowest price ever offered in our 8 years of publication – only $39.95 for our entire package - using Special Code 2013 (or 2013P for Premium Service – $79.95).

An Interesting Bet on Apple

Monday, December 17th, 2012

Today I would like to share an actual spread I placed in my personal account today.  It is a simple bet that come January 18, 2013, Apple will be trading at some price above $500.  As I write this, AAPL is at $513.

This little bet will make 62% after commissions at any ending price above $500.  It doesn’t have to go up a penny to make this much in a single month.  In fact, it can fall $13 and the same gain will come my way.
Check it out.

An Interesting Bet on Apple

One of the biggest stock market mysteries I have ever experienced in 30 years of trading almost every day has been the recent implosion of Apple stock.  For years, I was on the lookout for companies whose P/E ratio was less than its growth rate.

Two months ago when AAPL was trading north of $700, its growth rate was more than double the P/E ratio (not even adjusting for cash), even taking the traditionally-conservative company projections for next quarter.  Opportunities like this are quite rare in the investment world, at least they have been in the past.

Since that time the stock has fallen nearly $200.  I was not alone in my surprise at such a drop.  The average price target for 48 analysts is $750.  How can so many presumably smart (and well-informed) people be so horribly wrong?  Maybe they aren’t, at least in the longer run.

Trying to catch the bottom of a falling stock has been compared to catching a knife dropped from a great height (with your bare hands, of course).  I must admit that I have made several attempts to catch a bottom over the past two months, and my portfolio value has dropped right along with the stock.  It has been a painful time for us Apple bulls.

But now I think the bottom is finally here.  From a technical standpoint, there seems to be a strong resistance point at $505.  I’m not much of a technical indicator guy, but so many people are that sometimes you just have to follow their lead.  It has come close to $505 a couple of weeks ago, rose sharply, and then retreated to test that level once again last week, and has since recovered a bit.

Much of the recent sell-off has been attributed to tax-related selling.  If a person had a huge gain in the stock (and anyone who has bought it in earlier years surely has), it might be better to sell your shares in 2012 to avoid what looks like a higher long-term capital gains rate that may be instituted in 2013.  Many people are expected the rate to increase from 15% to at least 25% next year.  That would make it a good time to take some profits.

Anyone who sold AAPL for tax reasons probably still likes the stock (after all, it did give them a big win) and may buy it back once they read about millions of new iPhone 5 sales at Christmas and in China (and now, even at Wal-Mart) and anticipate what those sales might mean to earnings.

There are many other reasons that the stock should be trading higher in 2013.  It usually spikes higher in advance of the January earnings announcement which should come just after the January options expire.  When the announcement is made, the P/E ratio will surely be even lower than it is today since this will be the first quarter when the iPhone 5 results are in (the most profitable Apple product, and the biggest problem has been making it fast enough to keep up with the demand).

So here’s the little bet I made that Apple will be trading at some point higher than $500 on January 18, 2013:

I bought AAPL Jan-13 495 puts and sold Jan-13 500 puts, collecting $195 per spread, or $192 after commissions (in options lingo, I sold a vertical put spread).  If the stock closes at any price below $495, I will have to buy the spread back for $500 and I will lose $308 (the maximum risk I am taking).

My broker will issue a maintenance requirement for $500 per spread (this is not a loan like a margin requirement, but $500 per spread will have to be set aside in the account).  Since I collected $192, my actual net charge will be $308.  By the way, this kind of a spread is allowed in IRA accounts at most brokerages, including thinkorswim.

At any price above $500, both options will expire worthless, no commissions will be due, and I will make a gain of $192 on my maximum risk of $308.  That works out to about 62% on my money at risk.  Not bad for one month.

Of course, you should not take this risk with money you can’t afford to lose.

 

Three New (Weekly) Options Series Introduced

Tuesday, November 20th, 2012

The world of stock options is every changing.  Last week, three new series of options were introduced. Options trades should be aware of these new options, and understand how they might fit into their options strategies, no matter what those  strategies might be.

Three New (Weekly) Options Series Introduced

Last week, the CBOE announced the arrival of several new options series for our favorite ETFs as well as four individual popular stocks which have extremely high options activity.

Here they are:

For the above entities, there are now four Weekly options series available at any given time.  In the past, Weekly options for the following week became available on a Thursday (with eight days of remaining life).

This is a big change for those of us who trade the Weeklys (I know that seems to be a funny way to spell the plural of Weekly, but that is what the CBOE does).  No longer will we have to wait until Thursday to roll over short options to the next week to gain maximum decay (theta) for our short positions.

The stocks and ETFs for which the new Weeklys are available are among the most active options markets out there.  Already, these markets have very small bid-ask spreads (meaning that you can usually get very good executions, often at the mid-point of the bid-ask spread rather than being forced to buy at the ask price and sell at the bid price).  This advantage should extend to the new Weekly series, although I have noticed that the bid-ask spreads are slightly higher for the third and fourth weeks out, at least at this time.

The new Weeklys will particularly be important for Apple.  Option prices have traditionally sky-rocketed for the option series which comes a few days after their quarterly earnings announcements.  In the past, a popular strategy was to place a calendar or diagonal spread in advance of an announcement (further-out options tend to be far less expensive (lower implied volatility) than those expiring shortly after the announcement, and potentially profitable spreads are often available.  The long side had to be the newt monthly series, often a full three weeks later.

With the new Weekly series now being available, extremely inexpensive spreads might be possible, with the long side having only seven days of more time than the Weeklys that you are selling.  It will be very interesting come next January. 

     Bottom line, the new Weekly series will give you far more flexibility in taking a short-term view on stock price movement and/or volatility changes, plus more ways to profit from time decay.  It is good news for all options traders.

 

 

Closing Out The Options Play For The Apple Earnings Announcement

Monday, October 29th, 2012

Last week just before the Apple earnings announcement after the close on Thursday, I published an article on Seeking Alpha which suggested an options strategy to play prior to the announcement.  Basically, I spoke about taking advantage of the big Implied Volatility advantage for calendar spreads, and placing long-December (IV = 74) short-November (IV = 40) calendar spreads at many strike prices, both below and above the stock price.

Today I would like to offer you a link to the follow-up article also published at Seeking Alpha.

Closing Out The Options Play For The Apple Earnings Announcement

Here is the link:

Closing Out The Options Play For The Apple Earnings Announcement

IV for the December options fell more than we expected after the announcement.  This means that our original projections were too rosy.  We were fortunate enough to make a gain on the strategy nevertheless.   The learning experience was more valuable than the loss or gain.

An Options Strategy for Apple Bulls to Protect Against a $50 Drop in the Stock Price

Monday, October 8th, 2012

I have submitted an article to Seeking Alpha that I would like to share with you.

An Options Strategy for Apple Bulls to Protect Against a $50 Drop in the Stock Price

Here’s the linkApple Option Strategy

There seems to be a lot of interest in Apple (AAPL) these days.  While many investors are bullish on the long-run prospects for the company, many are concerned that in the short run they may have to endure a good-size drop in the stock price. 

A properly-devised options strategy can protect you against a $50 drop in the price while leaving you plenty of room to prosper if the stock continues to rise over time.

Any questions?   I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts.

You can see every trade made in 8 actual option portfolios conducted at Terry’s Tips and learn all about the wonderful world of options by subscribing here.   Why wait any longer to make this important investment in yourself?

I look forward to having you on board, and to prospering with you.

Terry

Caterpillar Options

Sunday, September 23rd, 2012

Today I submitted an article to Seeking Alpha that I would like to share with you.

Here’s the link – Caterpillar Options

There are lots of ways to make money with multiple calendar spreads.  Finding an underlying stock which enjoys an implied volatility (IV) advantage is a good start.  That is where Caterpillar (CAT) is right now.

While having an IV Advantage stacks the deck in your favor, it should not be used as a sole determinate in choosing an underlying instrument to trade options on.  It is possible to make good returns with the 10K Strategy when you don’t enjoy an IV Advantage, but it is extremely helpful whenever option prices make it possible.   

Any questions?   I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts.

You can see every trade made in 8 actual option portfolios conducted at Terry’s Tips and learn all about the wonderful world of options by subscribing here.   Why wait any longer to make this important investment in yourself?

I look forward to having you on board, and to prospering with you.

Terry

How We Made 613% With Apple Options In 7 Weeks And Expect To Do It Again In 4 Months

Monday, September 17th, 2012

The Apple portfolio has now made 613% over the last 7 weeks and today I would like to tell you more about it, including every current position that it has.

How We Made 613% With Apple Options In 7 Weeks And Expect To Do It Again In 4 Months

Here’s the linkHow We Did It

To accommodate those folks who signed up for our free newsletter after Labor Day because of the Seeking Alpha article, we are extending the special offer we made last week for an extra week.

The Special Offer – To Celebrate the re-establishment of Auto-Trade at TD Ameritrade/thinkorswim, we are offering our Premium service at the lowest price in the history of our company.  We have never before offered such a large discount for the Premium Service.  If you ever considered becoming a Terry’s Tips Insider, this would be the absolute best time to do it.

And now for the Special Offer – If you make this investment in yourself by midnight, September 18, 2012, this is what happens:

1)    For a one-time fee of only $75.95, you receive the White Paper (which normally costs $79.95 by itself), which explains my favorite option strategies in detail, , 20 “Lazy Way” companies with a minimum 100% gain in 2 years, mathematically guaranteed, if the stock stays flat or goes up, plus the following services:
 
2)    Two free months of the Terry’s Tips Stock Options Tutorial Program, (a $49.90 value).  This consists of 14 individual electronic tutorials delivered one each day for two weeks, and weekly Saturday Reports which provide timely Market Reports, discussion of option strategies, updates and commentaries on 8 different actual option portfolios, and much more. 

3)    Emailed Trade Alerts.  I will email you with any trades I make before I make them so you can mirror them yourself or have them executed for you by TD Ameritrade/thinkorswim through their Auto-Trade program. These Trade Alerts cover all 8 portfolios we conduct.

4)    Access to the Insider’s Section of Terry’s Tips, where you will find many valuable articles about option trading, and several months of recent Saturday Reports and Trade Alerts.

5)    A free copy of my e-book, Making 36%: Duffer’s Guide to Breaking Par in the Market Every Year, In Good Years and Bad (2012 Updated Version).

With this one-time offer, you will receive all of these Premium Service benefits for only $75.95, (normal price $119.95). I have never made an offer anything like this in the eleven years I have published Terry’s Tips.  But you must order by midnight on September 18, 2012. Click here and enter Special Code Auto12 in the box located on the right side of your screen.

I feel confident that this offer could be the best investment you ever make in yourself.  Celebrate the resumption of Auto-Trade at TD Ameritrade/thinkorswim with us.  But do it before the September 18th, as this offer will not be available after that day.

I look forward to prospering with you. 

Terry

P.S.  If you would have any questions about this offer or Terry’s Tips, please call Seth Allen, our Senior Vice President at 800-803-4595.  Or make this investment in yourself at the lowest price ever offered in our 11 years of publication – only $75.95 for our entire package (regular price $119.95). Click here and use Special Code Auto12.

A Calendar Spread Strategy to Capitalize on Apple’s Expected Announcement Next Wednesday

Monday, September 10th, 2012

This week is an unusual one for the Idea of the Week.  For the second week in a row, this newsletter supplies a link to that report. (My apologies if you came on board because of the earlier article.

Enjoy the report, and the report inside the article which documents every trade we made in an actual portfolio that gained us 452% after commissions in six weeks this summer.

A Calendar Spread Strategy to Capitalize on Apple’s Expected Announcement Next Wednesday

Here’s the linkA Calendar Spread Strategy

To accommodate those folks who signed up for our free newsletter after Labor Day because of the Seeking Alpha article, we are extending the special offer we made last week for an extra week.

The Special Offer – To Celebrate the re-establishment of Auto-Trade at TD Ameritrade/thinkorswim, we are offering our Premium service at the lowest price in the history of our company.  We have never before offered such a large discount for the Premium Service.  If you ever considered becoming a Terry’s Tips Insider, this would be the absolute best time to do it.

And now for the Special Offer – If you make this investment in yourself by midnight, September 11, 2012, this is what happens:

1)    For a one-time fee of only $75.95, you receive the White Paper (which normally costs $79.95 by itself), which explains my favorite option strategies in detail, , 20 “Lazy Way” companies with a minimum 100% gain in 2 years, mathematically guaranteed, if the stock stays flat or goes up, plus the following services:
 
2)    Two free months of the Terry’s Tips Stock Options Tutorial Program, (a $49.90 value).  This consists of 14 individual electronic tutorials delivered one each day for two weeks, and weekly Saturday Reports which provide timely Market Reports, discussion of option strategies, updates and commentaries on 8 different actual option portfolios, and much more. 

3)    Emailed Trade Alerts.  I will email you with any trades I make before I make them so you can mirror them yourself or have them executed for you by TD Ameritrade/thinkorswim through their Auto-Trade program. These Trade Alerts cover all 8 portfolios we conduct.

4)    Access to the Insider’s Section of Terry’s Tips, where you will find many valuable articles about option trading, and several months of recent Saturday Reports and Trade Alerts.

5)    A free copy of my e-book, Making 36%: Duffer’s Guide to Breaking Par in the Market Every Year, In Good Years and Bad (2012 Updated Version).

With this one-time offer, you will receive all of these Premium Service benefits for only $75.95, (normal price $119.95). I have never made an offer anything like this in the eleven years I have published Terry’s Tips.  But you must order by midnight on September 11, 2012. Click here and enter Special Code Auto12 in the box located on the right side of your screen.

I feel confident that this offer could be the best investment you ever make in yourself.  Celebrate the resumption of Auto-Trade at TD Ameritrade/thinkorswim with us.  But do it before the September 11th, as this offer will not be available after that day.

I look forward to prospering with you. 

Terry

P.S.  If you would have any questions about this offer or Terry’s Tips, please call Seth Allen, our Senior Vice President at 800-803-4595.  Or make this investment in yourself at the lowest price ever offered in our 11 years of publication – only $75.95 for our entire package (regular price $119.95). Click here and use Special Code Auto12.

Making 36%

Making 36% — A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).

Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.

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Success Stories

I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.

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