Traders Playground

Buying Swing: going bearish AAPL by buying 555 weekly puts at 5.00 area OVERSIZED and shorting 600 calls at 10.00 same contract amount of the long 605 stake, both next week expire options. I am down badly on the long calendar side 605 next week calls, of the 590 this week expire tomorrow calendar credit spread but it is offset by the larger iron condor also expiring this week. I am not sure AAPL is ready to pullback but my formulas have just now gone multi day negative so wish to no miss the possibility of a sharp retrasement after the rally we have had here on AAPL. Now if we do not see continuation retrasement next week on AAPL then that may point towards the other theory of a larger continuation gap theory. I definitely wish to be positioned bullishly into the announcement of how well the new iPad has sold witch I expect to be twice to 3 times as many as the last iPad 2 initial sales release but until then wish to be cautiouslybut aggressively bearish. With us going so far out of the money with these 555 puts we can if this formula dose not show follow trough, easily turn this position into another credit spread by shorting 560 puts same contract amount. The short on 600 calls is considerably stronger than this long puts position therefore have a mental stop on this calls short witch would be to take a loss on the short if we move back up to 595.00. Ok to simplify things, first we still have a iron condor AAPL with a short on AAPL 595 calls trough 600s and short 570 puts trough 565 puts with this iron condor expiring tomorrow. We today went long 605 next week calls to create protection after a gap up threatened the iron condor, but now that some real weakness may follow wish to protect against theta with a 600 short overnight and a long puts leg ready . I want to add one more entry oversized to the 555 puts if we bounce back but fail to get above 595 at a lower premium on these next week 555 puts.

This trade is one part of a larger strategy so please look back at Previous posts to see the whole picture. AND IF YOU ARE NEW, PAPER TRADE FOR AT LEAST A FEW MONTHS because this is ADVANCED OPTIONS TRADING !!