If I think AAPL is going to 100 by Feb. end, whats the best options play?

Discussion in 'Options' started by aeliodon, Jan 25, 2007.

  1. ?
  2. Bought some feb 95 calls today at .55. Was that a smart or stupid move?
  3. Depends on a number of items. There is no "best" or "worst" option play. It really comes down to your forecast and risk tolerance. With a FEB call, theta is going to chew you alive, so you're expecting AAPL to move fast and furious to the upside. If this is inline with your forecast, then this is not necessarily a bad play. You might've also considered a 95/100 bull call spread (or an equivalent put credit spread). In your case, AAPL has to move up ~10% just to be in the money by expiration. So the odds are that this position, if held until expiration, will not be profitable.
  4. dchang0


    Just be sure to watch out for options roll-forward, which usually causes the price of both calls and puts to drop dramatically.

    If I were doing the same play as you, I'd have bought April calls OR LEAPs. Buying and selling contracts further out than April would be challenging due to lower liquidity.
  5. thanks, lesson learned - when you buy 'cheap' options you get what you pay for.
  6. I don't know what is the BEST. That having been said, a February 90/100/110 Call Fly for $1.45 produces a very nice risk graph at $100. If I opened this trade, I would exit if the stock hit $100, irrespective of When that happened.

    Good luck.

  7. at these prices you're probably better off buying the stock, averaging in from here and down.

    I have been scaling into some extra options on selling. when aapl was near 85.70 the other day i bought some feb 85 calls.. now today when i saw momentum, i picked up some mar 100 calls as well.

    then the market sold off...

    ... hopefully we're still in a bull market.

    is the market -that- freaked out by Ford?
  8. ooops, I misread the title of this thread. If we're talking about the end of Feb, I would look at the March Fly, not the February. The debit would be in the $180 range. Not quite as attractive as February, but additional time to move to $100. I still like it.

    My first blush indication would be to merely hold this on paper and if AAPL goes down first, I might be able to get in for 10 or 15 cents cheaper. If it goes up and I miss out on this, it will be neither the first nor the last time.

  9. asap


    long a FEB/MAR 100 Calendar. it is cheap and will allow to hold an outright call as soon on APPL as soon as FEB call expires. It is like buying a 100C at discount.

    I also like the OTM fly proposed be the poster above because it allows to stay short vega while keeping a good directional exposure.

    good luck

  10. How about the 95/100/105 fly, if you really think AAPL will be pinned at 100...
    #10     Jan 25, 2007