Should I panic about my short position on Apple calls?

Discussion in 'Options' started by stevebearman, Jan 24, 2012.

  1. I am the expert you seek. Let those calls expire worthless and the premium you collected is ALL yours, just hang in there till expiry. They are $20.00 OTM and I don't think AAPL will trade that high.

    [​IMG]
    47,254 people like this.
     
    #31     Jan 26, 2012
  2. it's a bull market. just get out.
     
    #32     Jan 26, 2012
  3. spindr0

    spindr0

    You're absolutely right... infinite loss is a scary thing. I'd be far more fearful of 100 short shares of AAPL going from 450 to INFINITY than 100 long shares going from 450 to ZERO.

    BTW, can you name any stocks that have gone to infinity ??
     
    #33     Jan 26, 2012
  4. shfly

    shfly

    True statement...but he only needs a few weeks, right?! (Though it won't take a lot for AAPL to trade through the 470 area, it gapped up to 469'ish on the eranings report). And the stock is indeed in a upward channel...

    GL to him/her...
     
    #34     Jan 26, 2012
  5. The questionable wisdom of selling a naked call notwithstanding and as much as it pains me, I am going to agree with FF on this one. Do nothing. Hold the calls. They will expire worthless. Or you will lose your ass. Anyone with the nads to make a trade like this surely has the resources to cover it.
     
    #35     Jan 26, 2012
  6. Nine_Ender

    Nine_Ender

    This logic is how some large trading firms got destroyed by renegade traders. They see the cheap prices of options and think its free money, when in actual fact the price represents a real estimate of a long shot event occurring in a short time frame.

    In the case of AAPL and earnings, its not even a huge long shot, I think the market underpriced the chance. In fact, someone buying those calls could easily have made between 600% and 1000% return overnight.

    I looked at the "trade" ( 95% chance the poster is phony ), and at close he had a chance to get out at a $13,000 loss after hitting a higher loss earlier in the day. Assuming no margin call forces the issue, losing $13,000 when quite conceivably you could lose $300,000 on any decent trend up is the right strategy. There is no way risking $300,000 to save $16,000 is a smart decision.
     
    #36     Jan 26, 2012
  7. shfly

    shfly

    Totally agree...small loss...basically nothing vs. potential for several hundred K's...

    Option traders: Could he buy calls (strike at 475/500), and get out even if stocks ramp to 475+ by expiration? Or will it cost a lot more than just get out now, for less than 20K loss?

    If AAPL trades below the 443.73 area, sure could get a strong downdraft...but it could also get a huge bounce here...
     
    #37     Jan 26, 2012
  8. NoDoji

    NoDoji

    You think THAT'S scary? What if AAPL goes to infinity and BEYOND???
     
    #38     Jan 26, 2012
  9. People gettin trolled in this thread.
     
    #39     Jan 26, 2012
  10. spindr0

    spindr0

    What if beyond infinity is a black hole??
    We'll all be sucked in along with our portfolios.
    It'll be like the blind leading the blind!!!
    OMG, OMG, the sky is falling!
     
    #40     Jan 26, 2012