AAPL

Have a question about your personal investments? No matter how simple or complex, you can ask it here.

Re: AAPL

Postby Valuethinker » Thu Jan 24, 2013 8:28 am

baw703916 wrote:If one if of a mind to pick individual stocks, my advice is to use the Boredom Screen. Companies that people react to with disdain or better yet, indifference, have the best chance of being undervalued.


keep an eye on Japan. If they are serious about printing money, and they do it, then the lightbulb goes on in the world, that actually there is a cure. The best solution to a debt-deflation spiral is monetary recklessness. If they can prove that thesis then the door falls open.

And that could put value through the roof, because value stocks (should be, not sure empirically) are relatively more inflation sensitive.
Valuethinker
 
Posts: 24400
Joined: Fri May 11, 2007 12:07 pm

Re: AAPL (Apple Company stock)

Postby Taylor Larimore » Thu Jan 24, 2013 8:42 am

airahcaz wrote:
What are folks thoughts on AAPL getting back to 700? and for that matter, 1000?

With index funds, it is not necessary to waste time thinking or worrying about it.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
Taylor Larimore
Advisory Board
 
Posts: 19785
Joined: Tue Feb 27, 2007 9:09 pm
Location: Miami FL

Re: AAPL (Apple Company stock)

Postby Tim_in_GA » Thu Jan 24, 2013 9:30 am

Taylor Larimore wrote:
airahcaz wrote:
What are folks thoughts on AAPL getting back to 700? and for that matter, 1000?

With index funds, it is not necessary to waste time thinking or worrying about it.

Best wishes.
Taylor


I think about it a little since AAPL is the largest holding of an index fund which makes up a large part of my portfolio. But I don't dwell on it too much.
User avatar
Tim_in_GA
 
Posts: 295
Joined: Wed Jun 08, 2011 10:42 am

Re: AAPL

Postby Grt2bOutdoors » Thu Jan 24, 2013 9:38 am

Last night, AAPL closed at $464 in after-hours trading. Look for it to get hit today. Reversion to the mean.
"Luck is not a strategy" Asking Portfolio Questions
Grt2bOutdoors
 
Posts: 9853
Joined: Thu Apr 05, 2007 9:20 pm
Location: New York

Re: AAPL

Postby Bustoff » Thu Jan 24, 2013 10:56 am

I can't help but wonder, what do the AAPL buyers think they know that the AAPL sellers do not ?
“There are two times in a man's life when he should not speculate: when he can't afford it, and when he can.”
― Mark Twain
Bustoff
 
Posts: 894
Joined: Sat Mar 03, 2012 7:45 pm

Re: AAPL

Postby Grt2bOutdoors » Thu Jan 24, 2013 11:25 am

Bustoff wrote:I can't help but wonder, what do the AAPL buyers think they know that the AAPL sellers do not ?


There is a floor of $40 billion in cash on the balance sheet. The only problem is much like a free spending person - always taking out one soon comes to the bottom of the pot.
"Luck is not a strategy" Asking Portfolio Questions
Grt2bOutdoors
 
Posts: 9853
Joined: Thu Apr 05, 2007 9:20 pm
Location: New York

Re: AAPL

Postby Sheepdog » Thu Jan 24, 2013 1:41 pm

Breaking News : What to do with Apple now
http://finance.yahoo.com/blogs/breakout ... 39295.html

(Glad I don't invest in hot stocks anymore.)
People should not say everything they think. They should think about everything they say.
User avatar
Sheepdog
 
Posts: 3593
Joined: Tue Feb 27, 2007 4:05 pm
Location: Indiana, retired 1998 at age 65

Re: AAPL

Postby airahcaz » Fri Jan 25, 2013 6:03 pm

Spanked. 700 in a year?
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby TomatoTomahto » Fri Jan 25, 2013 6:59 pm

Excuse me, could you perhaps help me out? I was looking for the Bogleheads forum, and instead found something very different. It's not all that entertaining or informative; maybe we should invite Jim Cramer.
User avatar
TomatoTomahto
 
Posts: 2620
Joined: Mon Apr 11, 2011 2:48 pm

Re: AAPL

Postby stratton » Fri Jan 25, 2013 9:00 pm

A little AAPL collateral damage.

viewtopic.php?f=10&t=109689&newpost=1594585

Paul
...and then Buffy staked Edward. The end.
User avatar
stratton
 
Posts: 10779
Joined: Sun Mar 04, 2007 6:05 pm
Location: Puget Sound

Re: AAPL

Postby bawr » Fri Jan 25, 2013 10:22 pm

Grt2bOutdoors wrote:
Bustoff wrote:I can't help but wonder, what do the AAPL buyers think they know that the AAPL sellers do not ?


There is a floor of $40 billion in cash on the balance sheet. The only problem is much like a free spending person - always taking out one soon comes to the bottom of the pot.


Cash and other investments are actually $137 billion, or approximately $145 per share. These holdings make Apple's Braeburn Capital subsidiary one of the largest money managers in the world.
bawr
 
Posts: 14
Joined: Thu May 19, 2011 10:10 pm

Re: AAPL

Postby marc515 » Sat Jan 26, 2013 9:23 am

TomatoTomahto wrote:Excuse me, could you perhaps help me out? I was looking for the Bogleheads forum, and instead found something very different. It's not all that entertaining or informative; maybe we should invite Jim Cramer.


I find threads like this very informative. While "Bogleheads" might mean "index" investing, threads on individual stocks do provide some investing insight into the markets. Index investing may be passive in nature, but I do enjoy learning about stocks that make up the indexes.

Cramer may be a little over the top. :D
marc515
 
Posts: 68
Joined: Sun Jan 27, 2008 10:12 am

Re: AAPL

Postby YDNAL » Sat Jan 26, 2013 11:33 am

Tue Jan 15, 2013 7:54 pm, YDNAL wrote:
Tue Jan 15, 2013 6:57 pm, airahcaz wrote:We'll all know Jan 23rd right?

I don't get it..... why Jan 23rd? *

You started this thread Dec 18th and in a little less than 1 month you clearly see what UNdiversified risk is all about. Are you still interested in the question you posted in the OP?
Tue Dec 18, 2012 4:30 pm, airahcaz wrote:If not to post this, please delete, or let me know and I will delete.

What are folks thoughts on AAPL getting back to 700? and for that matter, 1000?

* Rhetorical question, no need to answer since I know that Apple plans to conduct a conference call to discuss financial results of its first fiscal quarter on Wednesday, January 23, 2013 at 2:00 p.m. PT / 5:00 p.m. ET.

Well?......

Apple Inc.
NASDAQ: AAPL - Jan 25 4:00pm ET
439.88 -10.62‎ (-2.36%‎)
Landy
Be yourself, everyone else is already taken -- Oscar Wilde
YDNAL
 
Posts: 13351
Joined: Tue Apr 10, 2007 5:04 pm
Location: Biscayne Bay

Re: AAPL

Postby TomatoTomahto » Sat Jan 26, 2013 4:16 pm

marc515 wrote:
TomatoTomahto wrote:Excuse me, could you perhaps help me out? I was looking for the Bogleheads forum, and instead found something very different. It's not all that entertaining or informative; maybe we should invite Jim Cramer.


I find threads like this very informative. While "Bogleheads" might mean "index" investing, threads on individual stocks do provide some investing insight into the markets. Index investing may be passive in nature, but I do enjoy learning about stocks that make up the indexes.

Cramer may be a little over the top. :D


As an analogy: I love ice hockey and dislike baseball. As the saying goes, that's what makes horse races (I though I would mix up 3 sports in one analogy). My discussing hockey on a baseball forum might provide some insight to the forum readers (i.e., there are common elements to both sports), but I don't think that I should and I wouldn't be surprised if forum members suggested that I go to a hockey forum with my insights on the NJ Devils' power play. Options on AAPL are possibly a wonderful thing, but I think it's fair to say that they aren't what I come to bogleheads.org to read. That's all I was saying.
User avatar
TomatoTomahto
 
Posts: 2620
Joined: Mon Apr 11, 2011 2:48 pm

Re: AAPL

Postby marc515 » Sat Jan 26, 2013 4:51 pm

TomatoTomahto wrote:
marc515 wrote:
TomatoTomahto wrote:Excuse me, could you perhaps help me out? I was looking for the Bogleheads forum, and instead found something very different. It's not all that entertaining or informative; maybe we should invite Jim Cramer.


I find threads like this very informative. While "Bogleheads" might mean "index" investing, threads on individual stocks do provide some investing insight into the markets. Index investing may be passive in nature, but I do enjoy learning about stocks that make up the indexes.

Cramer may be a little over the top. :D


As an analogy: I love ice hockey and dislike baseball. As the saying goes, that's what makes horse races (I though I would mix up 3 sports in one analogy). My discussing hockey on a baseball forum might provide some insight to the forum readers (i.e., there are common elements to both sports), but I don't think that I should and I wouldn't be surprised if forum members suggested that I go to a hockey forum with my insights on the NJ Devils' power play. Options on AAPL are possibly a wonderful thing, but I think it's fair to say that they aren't what I come to bogleheads.org to read. That's all I was saying.


Well, I guess the analogy applies somewhat; but hockey is not in baseball, whereas AAPL is in the various indexes. However, since AAPL is one of the most widely held stocks, and is in the major indexes, it plays an important role in Boglehead portfolios. It's amazing how its weighting can affect the indexes, and other funds with heavy AAPL holdings. Still say threads such as these are good every now and then.
marc515
 
Posts: 68
Joined: Sun Jan 27, 2008 10:12 am

Re: AAPL

Postby airahcaz » Sat Jan 26, 2013 5:19 pm

How about we turn the conversation to expertise that bogleheads know.

What would it take to make Aapl return to a growth stock versus becoming a value stock that gets stuck at the same price, yet pays out dividends?
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby marc515 » Sat Jan 26, 2013 5:54 pm

As an Apple products user, I'm not sure Apple can return to a major growth stock. At one time Apple products were the leading edge, now it appears players like Samsung are major contenders, and are capturing more and more market share. IOS is standard across the line, simple to use, and prone to less problems . I also think the iPhone is still the best made phone out there, but I don't think it really has any features over the Samsung Galaxy III. The iPads share the same qualities as the iPhone, and what keeps Apple customers coming back is the Apple ecosystem. Android is catching up, and if they could ever standardize android, it would eat more market share away from Apple. Oh, Apple has the best customer service I've ever received.

However, all that said, Apple has finally realized it's not the only dog in the field, and has to play catch up somewhat. In giving up market share, Apple will have to make due with lower margins.

So, while Apple products still have the edge, others are on their tail.
marc515
 
Posts: 68
Joined: Sun Jan 27, 2008 10:12 am

Re: AAPL

Postby YDNAL » Sat Jan 26, 2013 7:07 pm

airahcaz (OP) wrote:How about we turn the conversation to expertise that bogleheads know.

What would it take to make Aapl return to a growth stock versus becoming a value stock that gets stuck at the same price, yet pays out dividends?

I don't know what Bogleheads know, but my response earlier in this thread, and response now, is that AAPL is one company and one company comes with UNdiversified risk. After nearly 2 pages of posts, the noise drowned the issue with your original post... I guess the original question is no longer important.
Tue Dec 18, 2012 4:30 pm, airahcaz (OP) wrote:If not to post this, please delete, or let me know and I will delete.

What are folks thoughts on AAPL getting back to 700? and for that matter, 1000?

When we invest in diversified Index funds we don't care if AAPL is just another CSCO (cap today $112.3B). In 2000, CSCO was believed by several nuts to be headed to $1 trillion in market capitalization. BTW, Jeremy Siegel believed otherwise if it matters.
http://www.bizjournals.com/sanjose/stor ... l?page=all

It's not different this time.
Landy
Be yourself, everyone else is already taken -- Oscar Wilde
YDNAL
 
Posts: 13351
Joined: Tue Apr 10, 2007 5:04 pm
Location: Biscayne Bay

Re: AAPL

Postby linberl » Sun Jan 27, 2013 12:37 pm

I worked for Apple and left with a ton of stock. Sold all of it over 2011/2012. Made a lovely profit. Why did I sell? Everyone I know at the retail/corporate level was telling me things were changing, and not for the better. I've been a retail manager my whole life, and worked for enough companies to get a good feel for shifts in management and policy which indicate a downward trend. I love my Apple products and still think highly of the company but (1) it's too volatile for a retired person to own, and (2) once people think the magic is gone, it's gone. Maybe Apple will recover in the long run (it'll have to get back over $650 for me to feel I lost anything) but I sleep a lot better now following the Bogle path. If I was going to consider buying Apple again, I'd probably do it within a tech fund to spread some of the risk. YMMV.
linberl
 
Posts: 40
Joined: Mon Jan 23, 2012 4:32 pm

Re: AAPL

Postby airahcaz » Mon Jan 28, 2013 2:57 pm

Bottomed or dead cat bounce?
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby zaboomafoozarg » Mon Jan 28, 2013 9:36 pm

airahcaz wrote:Bottomed or dead cat bounce?


I was unaware that dead cats could bounce. :shock:
User avatar
zaboomafoozarg
 
Posts: 1031
Joined: Sun Jun 12, 2011 1:34 pm

Re: AAPL

Postby baw703916 » Mon Jan 28, 2013 11:04 pm

The term "dead cat bounce" is derived from the idea that "even a dead cat will bounce if it falls from a great height."[2] The phrase has been used on Wall Street for many years. The earliest use of the phrase dates from 1985 when the Singaporean and Malaysian stock markets bounced back after a hard fall during the recession of that year. Journalists Horace Brag and Wong Sulong of the Financial Times were reported as saying the market rise was a "dead cat bounce".[3] A similar expression in Cantonese has an older history and this may be the origin of the term.
Most of my posts assume no behavioral errors.
User avatar
baw703916
 
Posts: 5503
Joined: Sun Apr 01, 2007 2:10 pm
Location: Northern Virginia

Re: AAPL

Postby airahcaz » Thu Feb 07, 2013 10:17 pm

What does this cash announcement mean, recovery?
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby blumby » Thu Feb 07, 2013 10:56 pm

AAPL is one reason why I'm now a Boglehead. In college I received about $8k that I decided to use to first get into the market. In my clueless mind, I thought I should buy a stock with it (yes, just A stock). I had heard about the iPhone and thought it was revolutionary, so I bought $8k of AAPL. It did do well for me, but was so volatile and I spent most free time researching and following all things Apple. Eventually I sold it all, started reading about investing and found the Boglehead way.

One of the things I did with the money after I sold it was buy another type of "investment" - an engagement ring :happy
User avatar
blumby
 
Posts: 4
Joined: Tue Jan 08, 2013 3:12 pm

Re: AAPL

Postby BrandonBogle » Thu Feb 07, 2013 11:26 pm

I have shares of AAPL bought back in the day at about $85. Sold enough at $500 to pay myself back a couple years later and now enjoying the dividends regardless of the taxes on it. I know I could sell and put that money elsewhere, but I enjoy the 12% dividends too much. If it gets to the point they kill off dividends down the road and the stock tanks to $0, I still come out ahead and thus, I have zero plans to touch those holdings.


That said, the dividends are going to a Three Fund + REIT portfolio.
Last edited by BrandonBogle on Fri Feb 08, 2013 1:55 pm, edited 1 time in total.
User avatar
BrandonBogle
 
Posts: 1159
Joined: Tue Jan 29, 2013 12:19 am

Re: AAPL

Postby dbr » Fri Feb 08, 2013 11:16 am

BrandonBogle wrote: but I enjoy the 12% dividends too much.


Are you making a fundamental mental accounting mistake of rating the dividends on your purchase price rather than on the value of the stock today? The source of this error is thinking of volatile investments in ownership as if they were a fixed investment in debt, ie confusing the basic difference between stocks and bonds. The yield on AAPL is currently 2.3%, which may or may not be worth the risk you are taking to hold the stock. Nearly the same payout can be had in the much less volatile total stock market. You are engaging in the psychological error of ignoring present risk because the investment has been successful relative to your purchase price. Why on earth would you accept the possible loss of that asset because you "will have come out ahead"? If you think your risk evaluation suggests that it is time to take less risk, it might be a good idea to sell the holding and place the money in fixed income or in whatever your asset allocation suggests.
dbr
 
Posts: 13902
Joined: Sun Mar 04, 2007 10:50 am

Re: AAPL

Postby airahcaz » Tue Apr 30, 2013 7:13 pm

Down to 385 and now on a tear back up from there, on the debt issuance and rich guy pouring $100M into 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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby airahcaz » Sun Oct 27, 2013 9:50 pm

Earnings tomorrow!
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby Jfet » Sun Oct 27, 2013 11:05 pm

I walked by the Apple store in hellview, WA and it was hopping. I am guessing they are going to slightly beat the highest of estimates, maybe coming in at $8.15 earnings. If they do, $570 or so would be my guess for Tuesday. $470 is probably the bottom. If they did something crazy like announce a deal along with some off the wall earning like $8.40, then $600 is pretty easy.
Jfet
 
Posts: 1048
Joined: Tue Dec 21, 2010 8:20 pm

Re: AAPL

Postby TomatoTomahto » Mon Oct 28, 2013 7:33 am

Jfet wrote:I walked by the Apple store in hellview, WA and it was hopping.

My store was full of people hopping mad that they couldn't go back to the previous version of IOS. Genius said it was pretty consistent.

My daughter had recently given up her iPhone for a Samsung Galaxy. After the trouble I've had texting her Samsung (which the Geniuses could not fix), I'm considering following my daughter as she's delighted with her Samsung.

Continuing with the anecdata, I am probably going to buy a new iPad. My old trusty iPad is starting to seem slow. But, no Mac in my future, and the kids are fine with their old ones.

Overall, in my family, we rate Apple a meh.
User avatar
TomatoTomahto
 
Posts: 2620
Joined: Mon Apr 11, 2011 2:48 pm

Re: AAPL

Postby Jfet » Mon Oct 28, 2013 6:41 pm

Jfet wrote:I walked by the Apple store in hellview, WA and it was hopping. I am guessing they are going to slightly beat the highest of estimates, maybe coming in at $8.15 earnings. If they do, $570 or so would be my guess for Tuesday. $470 is probably the bottom. If they did something crazy like announce a deal along with some off the wall earning like $8.40, then $600 is pretty easy.


Hmm, so I said $8.15 and they came in at $8.25. I got closer than all of the other monkeys...I mean analysts. :happy
Jfet
 
Posts: 1048
Joined: Tue Dec 21, 2010 8:20 pm

Re: AAPL

Postby airahcaz » Mon Oct 28, 2013 8:40 pm

Very confused as to what the stock is doing after hours, seems to have recovered...
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby InvestorNewb » Mon Oct 28, 2013 8:45 pm

airahcaz wrote:Very confused as to what the stock is doing after hours, seems to have recovered...


It's down -1.22% from what I can see.
Current Holdings: VTI, VXUS, VNQ, VCE (largest to smallest)
User avatar
InvestorNewb
 
Posts: 900
Joined: Mon Sep 03, 2012 12:27 pm

Re: AAPL

Postby jupiter_man » Mon Oct 28, 2013 8:55 pm

I feel happy when AAPL goes up as I own them in the Total Index.
I feel indifferent when AAPL goes down as I own thousands of other companies as part of the Total index.

To be honest, sometimes work is so busy these days, I don't even get to see the business news all day. Only when I come home and have some time after kids go do bed to see whats going on from the bogleheads site. Thanks for your guidance in keeping the investments philosphy and my life so simple :-)
User avatar
jupiter_man
 
Posts: 53
Joined: Fri May 03, 2013 9:02 pm

Re: AAPL

Postby airahcaz » Tue Oct 29, 2013 1:07 pm

Can someone explain why the options are down so dramatically if the stock really hasn't moved since yesterday? It can't be all related to volatility

http://finance.yahoo.com/q/op?s=AAPL&m=2014-01
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby Ranger » Tue Oct 29, 2013 1:36 pm

airahcaz wrote:Can someone explain why the options are down so dramatically if the stock really hasn't moved since yesterday? It can't be all related to volatility

http://finance.yahoo.com/q/op?s=AAPL&m=2014-01


It is all related to volatility. Front weekly straddles were priced expecting movement of 27 to 28 dollars. Since there is not much movement so far, premium has collapsed.
User avatar
Ranger
 
Posts: 446
Joined: Tue Feb 20, 2007 11:27 pm
Location: Wolverine Nation

Re: AAPL

Postby Jfet » Tue Oct 29, 2013 2:57 pm

I was short some options and they have collapsed nicely today. I guess Apple being a higher priced stock, there are some who trade the options hoping for a quick buck, even when the options are twice the price of other stocks (adjusting for the market cap).

At one point you could buy Microsoft options for three times cheaper than the equivalent ratio Apple option.
Jfet
 
Posts: 1048
Joined: Tue Dec 21, 2010 8:20 pm

Re: AAPL

Postby airahcaz » Wed Oct 30, 2013 9:56 am

Stock is up today, and hopefully the Volatility? anyone have a link to the volatility fluctuation?
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby TomatoTomahto » Wed Oct 30, 2013 10:07 am

airahcaz wrote:Stock is up today, and hopefully the Volatility? anyone have a link to the volatility fluctuation?


Airahcaz, I might not be the first to mention it, but your post and your signature are really not in harmony.
User avatar
TomatoTomahto
 
Posts: 2620
Joined: Mon Apr 11, 2011 2:48 pm

Re: AAPL

Postby Ranger » Wed Oct 30, 2013 1:06 pm

airahcaz wrote:Stock is up today, and hopefully the Volatility? anyone have a link to the volatility fluctuation?


It does not work that way. Apple earnings is an binary event, so the volatility will be priced accordingly (vol. will be elevated). After the event is done volatility reverts to its normal range.

Think of an extreme example, like an small cap pharma stock with an pending FDA or patent approval. Before that event vol. will be astronomical. Assume the stock is trading at $25, after the FDA decision, stock will be 100 or zero. Option price has to be elevated to account for high vol. After the decision all the extra vol. will come out no matter what the decision is.

Here is APPLE vol. chart. Black line is implied vol. and pink line is realized vol. of past 30 days. One is forward looking and another is backward looking.
Image
User avatar
Ranger
 
Posts: 446
Joined: Tue Feb 20, 2007 11:27 pm
Location: Wolverine Nation

Re: AAPL

Postby hollowcave2 » Wed Oct 30, 2013 1:43 pm

Ranger,

Excellent explanation of APPL option volatility and the role of a major event affecting uncertainty about price. Yes, this is happening with APPL.

I think short term options are a pure gamble. There's more justification in buying LEAPS, despite the greater capital needed.
I hold AAPL as a part of my ETF MGC, the Mega Cap Index. That's fine for me because I look for the long term picture in a diversified portfolio.
User avatar
hollowcave2
 
Posts: 1681
Joined: Thu Mar 01, 2007 4:22 pm
Location: Sacramento, CA

Re: AAPL

Postby airahcaz » Wed Oct 30, 2013 1:55 pm

Hi folks, thanks!

@TomatoTomahto,
these options are far less than 5% of my portfolio. Said another way, I am more than 95% indexed in my overall portfolio.

@Ranger, many thanks as well. However if this is known behavior, couldn't one short prior to every earnings announcement, or simply buy puts and profit nicely? (on a sole volatility basis, of course if the stock goes in the wrong direction, they will also lose). Secondly, the stock has recovered today, unbeknownst to me as to the reasons why, and it seems VOL has also increased?

@hollowcave2, these WERE indeed LEAPS that are now short term options, as a pure gamble at this point, Expiring Jan 2014. Not sure I want to outlay anymore cash, or sell them now and buy a 2015 LEAP (which will cost more as well)
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby Jfet » Wed Oct 30, 2013 2:18 pm

A put will drop in price just like a call when the volatility dries up.

I am holding Jan 2015 $400 strike APPL calls while I have sold short April 2014 $520 strike calls.

I just love when the higher strike call decays to nothing. I paid $75 for the diagonal when Apple was trading at $480. I expect to get a 60% return or maybe a tad better....which isn't bad for ~ 6 months.
Jfet
 
Posts: 1048
Joined: Tue Dec 21, 2010 8:20 pm

Re: AAPL

Postby Electron » Wed Oct 30, 2013 3:53 pm

Note also that AAPL mini options representing 10 shares are now trading. That means that a holder of 50 shares of AAPL could sell 5 covered mini calls.

The volatility was quite high in the days prior to earnings release. The 11/01/13 $550 calls were priced over $8 per share late last week with the stock at $529. That's quite a nice gain for a one week trade if the stock stays under $550. I sold 5 mini calls at $8.20 per share and should pocket the premium and not be exercised unless AAPL makes a large move up in the next few days. The time premium is shrinking very fast now.
Electron
User avatar
Electron
 
Posts: 997
Joined: Sat Mar 10, 2007 9:46 pm

Re: AAPL

Postby Ranger » Wed Oct 30, 2013 6:55 pm

airahcaz wrote:
@Ranger, many thanks as well. However if this is known behavior, couldn't one short prior to every earnings announcement,


Since we are talking about earnings, I will discuss front month options. That way time value won't come into the picture. My earnings trade only last overnight (some time less, if i neutralize delta during o/n) to two weeks.

While it is true that during earnings Vol. is elevated compared to normal range, it does not mean that volatility is rich so one can short at will and mint money. These earnings volatility needs to be compared with previous earnings announcement to see if the vol. is rich or cheap. Also one needs to pay attention to earnings estimate dispersion.

When one is short options volatility crush is given and it helps for traders who are short, but big price (delta) movement can overcome this vol. crush.

Take example of recent GOOG earnings, when vega was run over by delta changes.

Prior to earnings GOOG vol. while rich was under-priced when compared to other earnings days.

Image

Image

Option market was expecting 3.5% movement, while historically it moved about 5.6% (median). This is about less than 25%le of other report days.

It is better to have long option strategies when the vol. is under-pricing (while richer compared to normal daily ranges) and short option strategies when vol is over estimating the price movements.

airahcaz wrote: Secondly, the stock has recovered today, unbeknownst to me as to the reasons why, and it seems VOL has also increased?



I don't see any recovery in AAPL vol. today
User avatar
Ranger
 
Posts: 446
Joined: Tue Feb 20, 2007 11:27 pm
Location: Wolverine Nation

Re: AAPL

Postby airahcaz » Fri Nov 29, 2013 1:51 pm

My options had been halved and now doubled back. Insane. Volatility up again?
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby Jfet » Fri Nov 29, 2013 11:37 pm

My AAPL spread is now worth well over $100...giving a nice boost to the rest of the account...up 41% YTD. Greed is good!
Jfet
 
Posts: 1048
Joined: Tue Dec 21, 2010 8:20 pm

Re: AAPL

Postby airahcaz » Tue Dec 03, 2013 5:36 pm

Jfet wrote:My AAPL spread is now worth well over $100...giving a nice boost to the rest of the account...up 41% YTD. Greed is good!


Although I am still down, my options are up like another 50% today. It has to be the implied vol.
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby airahcaz » Tue Dec 03, 2013 6:10 pm

Maybe some help, I dont think the delta on this option is THAT high? AAPL up 15 points or 2.74%.

Here is the option:
AAPL JAN 2014 605.0000 CALL
Last [Tick] 7.42[+]
Change 2.97
% Change 66.74%
Bid 7.3
Volume 844
Day High 7.45
Day Low 5.25
Previous Close 4.45
Prev. Close Date 12/02/2013
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

Re: AAPL

Postby airahcaz » Mon Jan 27, 2014 4:53 pm

Predictions of what happens in an hour?
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)
airahcaz
 
Posts: 913
Joined: Sat Oct 31, 2009 4:37 pm

PreviousNext

Return to Investing - Help with Personal Investments

Who is online

Users browsing this forum: 111, beachplum, Bing [Bot], boglenut, Dale_G, FunTimes, gfav, Gropes & Ray, nbseer, Near retirement, rob, saver65, Stan Dup, TroutMD and 89 guests