Per your advice, what's the alternative?ogd wrote:Yes, I too meant the stock is the risky asset. The problem is, once the stock hits the strike price you are left with a risky asset with no reward. When I sit on risky assets, I demand to be paid.
And you ado get paid, no question about it. The advantage of the covered call is the $9.70. The question is, is it enough. And that's a tough one. When you put it like you did, it looks like any price would be "enough" because the seller would have sold at $100 anyway. But with the option, they don't get to sell as soon as the stock reaches that price and that's the entire point of the option and its valuation.
AAPL
Re: AAPL
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
Re: AAPL
Sell the stock now or continue holding for tax reasons if he must, no option transaction. Then the rewards for risk are clear and you don't have to wonder whether that $9.70 was a good price. Which mich_bogle is probably in no position to determine compared to his Wall Street counterparts.
Re: AAPL
Fundamentally you miss the point that mich doesn't want to sell the stock now, so you're recommendation is not in-line with the request.ogd wrote:Sell the stock now or continue holding for tax reasons if he must, no option transaction. Then the rewards for risk are clear and you don't have to wonder whether that $9.70 was a good price. Which mich_bogle is probably in no position to determine compared to his Wall Street counterparts.
It is his trade, irrespective of any opinions of AAPL itself.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
Re: AAPL
When would it be appropriate to use covered calls? Never?ogd wrote:Sell the stock now or continue holding for tax reasons if he must, no option transaction. Then the rewards for risk are clear and you don't have to wonder whether that $9.70 was a good price. Which mich_bogle is probably in no position to determine compared to his Wall Street counterparts.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
Re: AAPL
I'm not missing that point, it's why I said "or continue holding for tax reasons". I also think selling is best. I consider myself free torrecommend something he can do but doesn't want to right now. Continuing to assume that undiversified risk in exchange for a couple of percentage points in taxes is not worth it.airahcaz wrote:Fundamentally you miss the point that mich doesn't want to sell the stock now, so you're recommendation is not in-line with the request.
For individual investors, never. Now if you have math and econ PhD s on staff and can spot options that are slightly overpriced, then maybe.airahcaz wrote:When would it be appropriate to use covered calls? Never?
Btw, it's not an argument I see you making. If you had argued with numbers that this option was actually worth $9.50 and mich_bogle got a good deal, I would have thought to myself "now that's a guy who knows his stuff".
Re: AAPL
It's a bit irrelevant on my expertise, and actually you hijacking my thread as the OP, but more importantly it is your opinion to never use covered calls, and rather advise a stock holder to sell the stock instead. Instead Mich is trying to get 109.7 when the stock hits 100. Let's agree to disagree.ogd wrote:I'm not missing that point, it's why I said "or continue holding for tax reasons". I also think selling is best. I consider myself free torrecommend something he can do but doesn't want to right now. Continuing to assume that undiversified risk in exchange for a couple of percentage points in taxes is not worth it.airahcaz wrote:Fundamentally you miss the point that mich doesn't want to sell the stock now, so you're recommendation is not in-line with the request.
For individual investors, never. Now if you have math and econ PhD s on staff and can spot options that are slightly overpriced, then maybe.airahcaz wrote:When would it be appropriate to use covered calls? Never?
Btw, it's not an argument I see you making. If you had argued with numbers that this option was actually worth $9.50 and mich_bogle got a good deal, I would have thought to myself "now that's a guy who knows his stuff".
Back to topic, hope AAPL a continues up its merry way and once it hits 100, let's combine forces and assess the option price and see how we can advise mich.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
Re: AAPL
Good time to sell (and exchange for total market index funds).airahcaz wrote:New all-time highairahcaz wrote:new 52 week high...
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
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Re: AAPL
oldzey wrote:Good time to sell (and exchange for total market index funds).airahcaz wrote:New all-time highairahcaz wrote:new 52 week high...
Yep.. I sold a decent-sized chunk at 100.81 yesterday. Now all I have remaining are the optioned shares (see above).
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Re: AAPL
I also paired down my trimmings a bit. My holdings are $88.59 pre-2014 split per share/$12.66 post-2014 split per share and sold at $700.07/$100.01 (pre/post-2014 split). Bought some VTI with the proceeds and happy that how things turned out. Meanwhile, I continue to love Apple and will help out their stock price some buy by buying some equipment from them
Re: AAPL
I can't find any real news, other than alleged hacks to their iCloud, that is driving the stock down today?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
Re: AAPL
It is likely today's announcement from Samsung.airahcaz wrote:I can't find any real news, other than alleged hacks to their iCloud, that is driving the stock down today?
http://fortune.com/2014/09/03/samsung-a ... ple-event/
I've been watching the significant price increase in Apple stock recently and wondering what will happen next week when their new products are announced. There could be a sharp move in one direction or the other.
Enjoying the Outdoors
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Re: AAPL
I'm holding on to my AAPL stock. I will get the iPhone 6 Plus on September 19th and if I like it, I will continue to keep AAPL.
Re: AAPL
What a rollercoaster, I almost bailed yesterday/today if it continued to go down.TravelforFun wrote:I'm holding on to my AAPL stock. I will get the iPhone 6 Plus on September 19th and if I like it, I will continue to keep AAPL.
I LOVE my IP6.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
Re: AAPL
My AAPL investment is up 563% (including reinvested dividends). Easily beating the return of any other investment I have in the same time frame by many multiples. Now that it split I actually have more than just a handful of shares. My cost basis is ~$16/sh.
Still it accounts for less than 3% of my portfolio. I remember being nervous buying those initial shares. In hindsight (ain't it great!), buying a few more would have been nice.
Still it accounts for less than 3% of my portfolio. I remember being nervous buying those initial shares. In hindsight (ain't it great!), buying a few more would have been nice.
Re: AAPL
Like others I am over 90% indexed. Some of my 5-10% play money is invested in AAPL Jan 2015 options.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
Re: AAPL
Options. You are a trader. Once uppn a time I read up on the process but never did anything more than that.airahcaz wrote:Like others I am over 90% indexed. Some of my 5-10% play money is invested in AAPL Jan 2015 options.
The majority of my investments are in index funds but I do own a few individual stocks, including AAPL. I'm a buy and hold investor, although I have sold two or three stocks over the years.
Re: AAPL
Good thing you're not posting in the GTAT threadbru wrote:My AAPL investment is up 563% (including reinvested dividends). Easily beating the return of any other investment I have in the same time frame by many multiples. Now that it split I actually have more than just a handful of shares. My cost basis is ~$16/sh.
Still it accounts for less than 3% of my portfolio. I remember being nervous buying those initial shares. In hindsight (ain't it great!), buying a few more would have been nice.
Re: AAPL
Well they've quadrupled, and my decision is whether to sell after iPad announcement, AAPL Oct earnings, or after Xmas sales.bru wrote:Options. You are a trader. Once uppn a time I read up on the process but never did anything more than that.airahcaz wrote:Like others I am over 90% indexed. Some of my 5-10% play money is invested in AAPL Jan 2015 options.
The majority of my investments are in index funds but I do own a few individual stocks, including AAPL. I'm a buy and hold investor, although I have sold two or three stocks over the years.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
Re: AAPL
If tomorrow my AAPL shares were worthless it would be disappointing but it wouldn't destroy me. I would still have 97% of my money.autonomy wrote:Good thing you're not posting in the GTAT thread
I've never even heard of GTAT. After reading about them for the past few minutes I wouldn't even be able to tell someone what they do (or did). Every day I hear about and see AAPL products. Like Peter Lynch said, "buy what you know". And more importantly, like many in the thread here talking about GAT and their problems have said, putting all your eggs in one basket is never a good idea.
Re: AAPL
If AAPL shares were zero tomorrow, I guarantee you'd be down far more than 3%.bru wrote:If tomorrow my AAPL shares were worthless it would be disappointing but it wouldn't destroy me. I would still have 97% of my money.autonomy wrote:Good thing you're not posting in the GTAT thread
I've never even heard of GTAT. After reading about them for the past few minutes I wouldn't even be able to tell someone what they do (or did). Every day I hear about and see AAPL products. Like Peter Lynch said, "buy what you know". And more importantly, like many in the thread here talking about GAT and their problems have said, putting all your eggs in one basket is never a good idea.
Apple is tethered to many companies and is a big part of the economy, directly and indirectly. Any general economy condition that causes Apple great harm will doubtlessly hit other companies just as hard (i.e. Verizon, ATT, Micron, Intel, Samsung, etc.). You'd probably see 10-20% fall or much more in the market BEFORE Apple shares approach worthless.
There are fewer situations where Apple implodes or is caused by their companies taking over their share. But in those cases, the fallout of losing Apple and the iEconomy would be just as damaging in the short run with closed Apple stores, unemployed Apple retail employees, unemployed App developers, etc. So even if Apple were ground zero, the consequences to the economy and thus other stocks won't be insignificant.
http://www.cnbc.com/id/48975662
GM wasn't too big to fail, but that's the scale of event and fallout that could involved Apple crisis.
Re: AAPL
Yes I understand that. Didn't want to calculate its position in all the index funds. I think my point was made. AAPL shares I own individually are a small part of my portfolio.inbox788 wrote:
If AAPL shares were zero tomorrow, I guarantee you'd be down far more than 3%.
Apple is tethered to many companies and is a big part of the economy, directly and indirectly. Any general economy condition that causes Apple great harm will doubtlessly hit other companies just as hard (i.e. Verizon, ATT, Micron, Intel, Samsung, etc.). You'd probably see 10-20% fall or much more in the market BEFORE Apple shares approach worthless.
Sorry I ever posted on this thread. Everyone loves to bash Apple. Whatever. I think more than a few of those bashers wish they bought it when it was (split adjusted) $10 or $15. Which really wasn't that long ago. My (paper) gain is what it is. I'm not going to apologize for it. Tomorrow it will be different.
Re: AAPL
Today's positive movement when the markets tanked is devoid of any logic.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
Re: AAPL
I may be selling all my options if it eclipses 110 in the next week.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
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Re: AAPL
I'm kind of curious why my $100 option hasn't triggered yet.. when it was around $95 I sold a contract to sell it at a price of $100. I figured it would trigger right around $109 (due to fees) but nothing yet. Can anyone clarify?
Re: AAPL
??? I hope you're not talking about stock options, because it shows a lack of understanding.mich_bogle wrote:I'm kind of curious why my $100 option hasn't triggered yet.. when it was around $95 I sold a contract to sell it at a price of $100. I figured it would trigger right around $109 (due to fees) but nothing yet. Can anyone clarify?
1) What is the stock you are referring to in the option? AAPL?
2) Is it a call or put?
3) Did you buy it or sell it? sell?
4) What is the strike price? 100?
5) What is the expiration date?
6) Do you own the underlying, that is AAPL stock? How many shares?
7) How many option contracts did you sell? 1?
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Re: AAPL
See back a month or two in this thread for some discussion of it.
I sold a covered call at a strike price of $100.00 with an expiration next year.
I fully admit that I did not have full understanding of how the trade works, but enough of a working understanding to know that this is a pretty boring trade with limited downside, when it comes down to it.
I sold a covered call at a strike price of $100.00 with an expiration next year.
I fully admit that I did not have full understanding of how the trade works, but enough of a working understanding to know that this is a pretty boring trade with limited downside, when it comes down to it.
inbox788 wrote:??? I hope you're not talking about stock options, because it shows a lack of understanding.mich_bogle wrote:I'm kind of curious why my $100 option hasn't triggered yet.. when it was around $95 I sold a contract to sell it at a price of $100. I figured it would trigger right around $109 (due to fees) but nothing yet. Can anyone clarify?
1) What is the stock you are referring to in the option? AAPL?
2) Is it a call or put?
3) Did you buy it or sell it? sell?
4) What is the strike price? 100?
5) What is the expiration date?
6) Do you own the underlying, that is AAPL stock? How many shares?
7) How many option contracts did you sell? 1?
Re: AAPL
The option still has time premium in the price since expiration is next year. Any speculator holding that particular call option would make a greater profit just selling the option at current market price rather than exercising it. You might not be exercised until the expiration date or very close to it. Early exercise is also possible in some cases to capture a dividend.mich_bogle wrote:I'm kind of curious why my $100 option hasn't triggered yet.. when it was around $95 I sold a contract to sell it at a price of $100. I figured it would trigger right around $109 (due to fees) but nothing yet. Can anyone clarify?
Enjoying the Outdoors
Re: AAPL
sold some of my spreads when the stock peaked 110, held half of my options spreads still, and doing well, but nervous
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
Re: AAPL
This stock puzzles me greatly, down all day, consecutively, now closes up, why?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
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Re: AAPL
The iWatch doesn't exist.airahcaz wrote:Momentum pushes it higher till iWatch?
Re: AAPL
Yetboroc7 wrote:The iWatch doesn't exist.airahcaz wrote:Momentum pushes it higher till iWatch?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
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Re: AAPL
I think he meant the name iWatch doesn't exist. It is called Apple Watch.airahcaz wrote:Yetboroc7 wrote:The iWatch doesn't exist.airahcaz wrote:Momentum pushes it higher till iWatch?
Re: AAPL
Yetfastpace_re wrote:I think he meant the name iWatch doesn't exist. It is called Apple Watch.airahcaz wrote:Yetboroc7 wrote:The iWatch doesn't exist.airahcaz wrote:Momentum pushes it higher till iWatch?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
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Re: AAPL
I read a good article on Apple recently where it was noted that the stock is now back in favor among analysts. What an incredible ride.
John C. Bogle: “Simplicity is the master key to financial success."