Plucking Ripe Profits from Apple

It’s a time-tested aphorism:  An Apple a day keeps the doctor away.  This week, we saw how properly timed options strategies came to fruition with Apple Inc. (NASDAQ:AAPL).

Can AAPL shares in your portfolio keep your account in good financial health?  I answer with a resounding “yes,” as would many investors who are happy with the way their AAPL shares have performed over the long haul.

But what about AAPL options?

Options traders also have benefited from this innovative high-tech stalwart.  Some have even made it a habit of trading AAPL daily (perhaps the saying should be changed to: “an AAPL trade a day…”).  After all, staying poised to trade support and resistance and other short-term technical patterns or signals is in their best interest.

Let’s be clear: I’m not here to make a day trader out of you.  Even for advanced traders, day trading requires considerable skill and nerve to pay off over the long haul.

That said, I want to show you the highly profitable outcome of a Money Calendar AAPL trade that I recommended on July 9.

As you can see from the graphic above, I pinpointed on July 9 a simple long call or buy call option trade, with AAPL showing up on the Money Calendar list.  The option trade was simply one of buying the August 130 calls, which were filled at 2 points. Our profit target at that time was 100%, or 4 points.

Take a look at what happened on AAPL from the start date to July 20, when my 100% target on the option was hit.  AAPL racked up a nifty price run:

The morning of July 20, AAPL opened up higher, and the options opened at 4.45, offering a 122.5% gain.

You can see below where the options were at the close of the day – upwards of $5.40.  Intra-day they were even a bit higher.  I saw them at one time priced $5.50, which would have been a 175% gainer for those that got that price.

To reiterate the Money Calendar advice that I gave on July 20:

Action to Take:

Sell-to-close AAPL August 21, 2015 $130 Calls (AAPL150821C00130000) for a minimum 100% return.

This was darn near an AAPL increase a day, enhancing the financial health of trading accounts belonging to any and all traders who were in on this trade.

On July 21, Apple reported double-digit increases in revenue and earnings for its fiscal third quarter, an impressive year-over-year rate of growth for a company of its huge size.  Yet the results disappointed Wall Street analysts and Apple stock got bruised.

We got out right before the company announced earnings, which was the right thing to do!

Until next time…

Tom Gentile

America’s #1 Trader

4 Responses to “Plucking Ripe Profits from Apple”

  1. David Peterson

    FYI: I bought the AAPL Aug21 C on July 9 for $1.86, sold it slightly ahead of your suggestion on July 20 for $5.65 for a slightly more than 200% gain.
    But I am likely going to lose the nice profit on my 5 AAPL contracts on your recommended IBM 7/31/15 $167.5 C (2 contracts) which looks likely to lose almost the total value of my premium. I don’t recall that you suggested that as a vertical spread. I purchased it as a simple Call.

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