AAPL

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angelescrest
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Re: AAPL

Post by angelescrest » Mon Jan 27, 2014 4:59 pm

airahcaz wrote:Predictions of what happens in an hour?
How you feeling now? Not exactly what you were hoping for. The fact that they are playing sooth your nerves classical piano on the wait tells you everything you need to know.

airahcaz
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Re: AAPL

Post by airahcaz » Mon Jan 27, 2014 5:06 pm

boroc7 wrote:
The fact that they are playing sooth your nerves classical piano on the wait tells you everything you need to know.
eh?
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Jfet
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Re: AAPL

Post by Jfet » Mon Jan 27, 2014 5:28 pm

boroc7 wrote:
airahcaz wrote:Predictions of what happens in an hour?
How you feeling now? Not exactly what you were hoping for. The fact that they are playing sooth your nerves classical piano on the wait tells you everything you need to know.
I wouldn't beat him up too much. If you own SPY or any large US index you probably have 2% or 3% of it in Apple yourself. Expect a 0.5% drop in the market tomorrow.

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Re: AAPL

Post by abuss368 » Mon Jan 27, 2014 6:27 pm

Considering the timing of the original post, the stock still has not "gotten back" to $700.

I am glad I left the evil stock picking days years ago with no desire to ever return.
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Re: AAPL

Post by Jfet » Mon Jan 27, 2014 6:42 pm

Didn't it take like 12 years for the stock market to get back to the 2000 highs? Apple still has 10 years to go before calling it a dog.

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Re: AAPL

Post by abuss368 » Mon Jan 27, 2014 8:27 pm

Remember when Gordon Gekko said "It is a dog with fleas"?

Priceless.
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angelescrest
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Re: AAPL

Post by angelescrest » Mon Jan 27, 2014 8:27 pm

airahcaz wrote:
boroc7 wrote:
The fact that they are playing sooth your nerves classical piano on the wait tells you everything you need to know.
eh?
What were you doing, reading headlines? I thought you'd be listening to the call-in for the earning release with Cook & co. at 5PM.
http://investor.apple.com/

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Re: AAPL

Post by angelescrest » Mon Jan 27, 2014 8:40 pm

Jfet wrote:
boroc7 wrote:
airahcaz wrote:Predictions of what happens in an hour?
How you feeling now? Not exactly what you were hoping for. The fact that they are playing sooth your nerves classical piano on the wait tells you everything you need to know.
I wouldn't beat him up too much. If you own SPY or any large US index you probably have 2% or 3% of it in Apple yourself. Expect a 0.5% drop in the market tomorrow.
Only because he sounded so hopeful and in good spirits, as I actually own a decent stake. I've got some residuals left from years ago (first transaction I ever made in my life). I sold most of it off for the down payment of my home a year and a half ago.

Apple is a great company, but a lot of the momentum and luster carrying it is lost. $1000 is probably not going to happen any time soon. If it does, I'm thinking it also means VTI has also doubled, but what would I know.

airahcaz
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Re: AAPL

Post by airahcaz » Wed Apr 23, 2014 9:40 pm

Beat earnings, and up 40+ after hours. Back on the gravy train?
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zaboomafoozarg
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Re: AAPL

Post by zaboomafoozarg » Wed Apr 23, 2014 9:50 pm

airahcaz wrote:Beat earnings, and up 40+ after hours. Back on the gravy train?
LOL

I hope so, a couple percent of my US holdings are in AAPL.

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BrandonBogle
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Re: AAPL

Post by BrandonBogle » Wed Apr 23, 2014 10:04 pm

Doing a 7-for-1 split on Friday as well I believe.

http://www.forbes.com/sites/steveschaef ... investors/

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Re: AAPL

Post by SuperGrafx » Wed Apr 23, 2014 11:00 pm

BrandonBogle wrote:Doing a 7-for-1 split on Friday as well I believe.

http://www.forbes.com/sites/steveschaef ... investors/
So what's the consensus?
Is it worth splashing out on a few shares after the split goes through?

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BrandonBogle
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Re: AAPL

Post by BrandonBogle » Wed Apr 23, 2014 11:17 pm

SuperGrafx wrote:
BrandonBogle wrote:Doing a 7-for-1 split on Friday as well I believe.

http://www.forbes.com/sites/steveschaef ... investors/
So what's the consensus?
Is it worth splashing out on a few shares after the split goes through?
The remaining shares I have were bought when APPL was less than $100/share (pre-2014 split, post-2005 split), so no, I won't be selling any shares so I avoid the capital gains taxes. Honestly wish I bought more shares in my pre-Boglehead days and I probably should shave another decade of my work life prior to retirement.

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Re: AAPL

Post by airahcaz » Mon Apr 28, 2014 3:45 pm

why is it up today? short covering? start of a long term rally?
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Re: AAPL

Post by chaz » Mon Apr 28, 2014 5:10 pm

airahcaz wrote:why is it up today? short covering? start of a long term rally?
Maybe just fluctuating.
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Re: AAPL

Post by airahcaz » Tue May 27, 2014 10:20 pm

Next stop 700's, especially after split?
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Re: AAPL

Post by bnes » Wed May 28, 2014 1:40 am

Fact is almost everyone owns AAPL. It's a top holding in mutual funds, active or not. Your low cost index fund holds a lot of Apple.
You are probably non-diversified with regard to AAPL stock tanking, even as the most die-hard bogglehead.

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Re: AAPL

Post by letsgobows » Wed May 28, 2014 11:16 am

airahcaz wrote:Next stop 700's, especially after split?
if the stock hits $100/sh after the split, I guess u could technically say its in the 700s. ill probably sell the majority of my AAPL holdings after the split and put it index funds. ill keep a few shares for sentimental reasons, but for the most part, im gonna stick w indexing gong forward.

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Re: AAPL

Post by izreel » Wed May 28, 2014 12:31 pm

I'm still holding a bunch of AAPL. I've had it since $80 and more throughout the years. I'm not buying anymore but it's one of those holdings I really don't want to let go.

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Re: AAPL

Post by airahcaz » Mon Jun 09, 2014 3:50 pm

After split, a little more than 6 points to all time highs
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Re: AAPL

Post by airahcaz » Mon Jul 07, 2014 4:22 pm

52 week high
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mich_bogle
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Re: AAPL

Post by mich_bogle » Mon Jul 07, 2014 4:27 pm

Two months ago AAPL represented about 50% of my portfolio. Now I am converting it to a boglehead portfolio and have sold off 75% of my holdings. It's been a busy month of selling. :)

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Re: AAPL

Post by airahcaz » Mon Jul 07, 2014 4:36 pm

mich_bogle wrote:Two months ago AAPL represented about 50% of my portfolio. Now I am converting it to a boglehead portfolio and have sold off 75% of my holdings. It's been a busy month of selling. :)
Cause you started a long time ago, or did you decide to buy a decent chunk in the past few years?
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Re: AAPL

Post by mich_bogle » Mon Jul 07, 2014 4:50 pm

airahcaz wrote:
mich_bogle wrote:Two months ago AAPL represented about 50% of my portfolio. Now I am converting it to a boglehead portfolio and have sold off 75% of my holdings. It's been a busy month of selling. :)
Cause you started a long time ago, or did you decide to buy a decent chunk in the past few years?

I bought $500 worth back in 1992 and never sold any until last month. 700 shares post-split

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Re: AAPL

Post by Bungo » Mon Jul 07, 2014 4:52 pm

Looks like 3.3% of my US stock allocation is in AAPL. Within VFINX, of course. :)

LTC
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Re: AAPL

Post by LTC » Mon Jul 07, 2014 10:25 pm

mich_bogle wrote:Two months ago AAPL represented about 50% of my portfolio. Now I am converting it to a boglehead portfolio and have sold off 75% of my holdings. It's been a busy month of selling. :)
I applaud you in being able to sell your AAPL stock as you make the conversion. How are you handling that emotionally? I struggle with the emotional part of selling stocks I have owned a long time and have done very well for me. At my age, in order to simplify our investments, I know in my "head" that a 3 or 4 Fund portfolio is the way to go but I find it so hard in my "heart" to execute the plan. I appreciate any insight you might be able to share in terms of how you handled your emotion in making the conversion.

If anyone else has any personal insight on how you did this and would be OK in posting, I'd appreciate reading what you have to say.

Thanks

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Re: AAPL

Post by airahcaz » Mon Jul 07, 2014 10:41 pm

LTC wrote:
mich_bogle wrote:Two months ago AAPL represented about 50% of my portfolio. Now I am converting it to a boglehead portfolio and have sold off 75% of my holdings. It's been a busy month of selling. :)
I applaud you in being able to sell your AAPL stock as you make the conversion. How are you handling that emotionally? I struggle with the emotional part of selling stocks I have owned a long time and have done very well for me. At my age, in order to simplify our investments, I know in my "head" that a 3 or 4 Fund portfolio is the way to go but I find it so hard in my "heart" to execute the plan. I appreciate any insight you might be able to share in terms of how you handled your emotion in making the conversion.

If anyone else has any personal insight on how you did this and would be OK in posting, I'd appreciate reading what you have to say.

Thanks
I've heard a guy sell half and let the rest run and then continue to sell half (of remaining) at some frequency until the original stock is less than 10% of the overall portfolio.

Say AAPL was $100K, sell $50K and left with $50K. Then sell $25K of the $50K and be left with $25K of AAPL and so on.

The problem with this is of course timing and an assumption that the stock will continue to run.

However, for this risk, this gentleman was happy to sell half of his AAPL and convert to index funds, leaving the rest as pretty much a gamble, but also allows him to not have to drastically liquidate all AAPL at once.

I will also say that there are ways to lock in profits using options, or even converting the whole AAPL stock position to cash and an options spread.
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Re: AAPL

Post by BrandonBogle » Mon Jul 07, 2014 10:54 pm

AAPL is my only stock holding that I have a hard time trimming. All the others I hold are simply held because their capital gains are too high. AAPL is the same as I bought at $87-92/share before the latest split. When it was over $400, I sold half of my holdings to "make back" my money. I sold some more when it first went past $700. The rest I haven't touched, especially now they pay a dividend. Even if I don't think about the capital gains, I still would have a hard time pulling the trigger. Thankfully, even after growing 700%, it is still a small holding in my portfolio and at this point, I think I can just ignore it as part of my "play holdings".

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Re: AAPL

Post by airahcaz » Tue Jul 08, 2014 6:32 am

BrandonBogle wrote:AAPL is my only stock holding that I have a hard time trimming. All the others I hold are simply held because their capital gains are too high. AAPL is the same as I bought at $87-92/share before the latest split. When it was over $400, I sold half of my holdings to "make back" my money. I sold some more when it first went past $700. The rest I haven't touched, especially now they pay a dividend. Even if I don't think about the capital gains, I still would have a hard time pulling the trigger. Thankfully, even after growing 700%, it is still a small holding in my portfolio and at this point, I think I can just ignore it as part of my "play holdings".
Have you looked into covered call options?
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Re: AAPL

Post by mich_bogle » Tue Jul 08, 2014 10:16 am

LTC wrote:
mich_bogle wrote:Two months ago AAPL represented about 50% of my portfolio. Now I am converting it to a boglehead portfolio and have sold off 75% of my holdings. It's been a busy month of selling. :)
I applaud you in being able to sell your AAPL stock as you make the conversion. How are you handling that emotionally? I struggle with the emotional part of selling stocks I have owned a long time and have done very well for me. At my age, in order to simplify our investments, I know in my "head" that a 3 or 4 Fund portfolio is the way to go but I find it so hard in my "heart" to execute the plan. I appreciate any insight you might be able to share in terms of how you handled your emotion in making the conversion.

If anyone else has any personal insight on how you did this and would be OK in posting, I'd appreciate reading what you have to say.

Thanks

Thank you.
Selling the first chunk was definitely bittersweet, and was a decision I had been mulling over for months. If not for the cap gains I probably would have done it in 2012 or 2013.
However it felt like a totally rational decision. It was a lot of fun watching the stock soar as Apple went from being Scrappy Underdog to Master of the Universe. Now that they are at the top, though, I think they will likely be a decently-performing, blue-chip-like stock, but having one company like that making up the lion's share of my portfolio just wasn't rational.

After I sold that first chunk, it has been easy for me to sell further chunks in dribs and drabs - it helped that I had just moved everything to Ameritrade so I have free commissions for a few weeks. I plan to keep about 5-10% of my portfolio in AAPL for the mid-term.

I have one more chunk of about 100 shares to sell, and I think I am going to try using the covered call options strategy for them, to squeeze a few hundred extra bucks out of a sale I was going to make anyway.

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Re: AAPL

Post by BrandonBogle » Tue Jul 08, 2014 11:23 am

airahcaz wrote: Have you looked into covered call options?
I have not. Anything beyond a long-term buy and hold is not permitted by my IPS as "too complicated to care about".

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Re: AAPL

Post by mich_bogle » Tue Jul 08, 2014 11:34 am

BrandonBogle wrote:
airahcaz wrote: Have you looked into covered call options?
I have not. Anything beyond a long-term buy and hold is not permitted by my IPS as "too complicated to care about".
I've been researching them, and as best I can tell they are kind of a no brainer if you are in my (our?) position, which is a desire to sell a stock anyway.
If AAPL is currently at $95 and I know that I am planning on selling 100 shares when it hits 97, I may be able to make an extra $400-500 just buy selling a covered call option with a $97 strike price.

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Re: AAPL

Post by BrandonBogle » Tue Jul 08, 2014 11:44 am

mich_bogle wrote:I've been researching them, and as best I can tell they are kind of a no brainer if you are in my (our?) position, which is a desire to sell a stock anyway.
If AAPL is currently at $95 and I know that I am planning on selling 100 shares when it hits 97, I may be able to make an extra $400-500 just buy selling a covered call option with a $97 strike price.
Perhaps -- I have not read on the intricacies of them. However, I would not seel AAPL even at $200. I have too much in capital gains that I would not sell and pay taxes on them. I almost reach the 28% Fed bracket and I pay 7% NC taxes, so it isn't worth it to me to sell a holding that represents 2% of my portfolio (not counting where AAPL is part of MF holdings).

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Re: AAPL

Post by mich_bogle » Wed Jul 09, 2014 10:07 am

For others curious about this strategy, I just executed a covered call sale. I was able to get $970 this way. If AAPL goes above $100 anytime in the next year, then I will automatically sell the stock -- which I would have done anyway.

The only downside is that I need to keep holding it if it does not go above $100 during that time, which I am fine with.

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Re: AAPL

Post by ogd » Wed Jul 09, 2014 10:43 am

mich_bogle wrote:For others curious about this strategy, I just executed a covered call sale. I was able to get $970 this way. If AAPL goes above $100 anytime in the next year, then I will automatically sell the stock -- which I would have done anyway.
mich_bogle wrote:I've been researching them, and as best I can tell they are kind of a no brainer if you are in my (our?) position, which is a desire to sell a stock anyway.
If AAPL is currently at $95 and I know that I am planning on selling 100 shares when it hits 97, I may be able to make an extra $400-500 just buy selling a covered call option with a $97 strike price.
I think you are misunderstanding this somewhat. If AAPL reaches the stock price, you will not automatically sell it at that price, but instead you have to wait for the option buyer or option expiration. Meanwhile, you are sitting on an investment that won't be making you any money. If the entire market moves up with AAPL while you're stuck holding those shares with no upside left, this can be a significant opportunity cost, since you can't yet buy what you were planning to.

The buyer did not pay for the opportunity of buying AAPL at market price if it climbs to $100, they could have had that for free. They paid for the opportunity to get the upside above $100 for little risk. Your transaction was not a no brainer. This is a common misunderstanding.

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Re: AAPL

Post by airahcaz » Wed Jul 09, 2014 11:19 am

ogd wrote:
mich_bogle wrote:For others curious about this strategy, I just executed a covered call sale. I was able to get $970 this way. If AAPL goes above $100 anytime in the next year, then I will automatically sell the stock -- which I would have done anyway.
mich_bogle wrote:I've been researching them, and as best I can tell they are kind of a no brainer if you are in my (our?) position, which is a desire to sell a stock anyway.
If AAPL is currently at $95 and I know that I am planning on selling 100 shares when it hits 97, I may be able to make an extra $400-500 just buy selling a covered call option with a $97 strike price.
I think you are misunderstanding this somewhat. If AAPL reaches the stock price, you will not automatically sell it at that price, but instead you have to wait for the option buyer or option expiration. Meanwhile, you are sitting on an investment that won't be making you any money. If the entire market moves up with AAPL while you're stuck holding those shares with no upside left, this can be a significant opportunity cost, since you can't yet buy what you were planning to.

The buyer did not pay for the opportunity of buying AAPL at market price if it climbs to $100, they could have had that for free. They paid for the opportunity to get the upside above $100 for little risk. Your transaction was not a no brainer. This is a common misunderstanding.
As the stock significantly increases beyond $100, the likelihood of being called away is actually very high (one does not need to wait for expiration).

In fact, can execute the transaction themselves, namely by selling the stock and buying the call back!

This is a good purpose of covered calls, when used correctly, as in this case. I see nothing wrong with it. The owner is happy to sell at $100. (really $109.70)
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Re: AAPL

Post by mich_bogle » Wed Jul 09, 2014 11:23 am

Thanks for the clarifications. I should probably have held off because I realized I did not have 100% understanding of how this transaction works, but I did run it past a friend who works at a brokerage for a sanity check before executing.

In the meantime while I wait for the option to either exercise or expire, I have an extra $970 to put to work in the market.

One other point where I'm confused... if the option gets exercised, is that being done by the exact same individual to whom I sold it, or can it be done by anyone?
airahcaz wrote:
ogd wrote:
mich_bogle wrote:For others curious about this strategy, I just executed a covered call sale. I was able to get $970 this way. If AAPL goes above $100 anytime in the next year, then I will automatically sell the stock -- which I would have done anyway.
mich_bogle wrote:I've been researching them, and as best I can tell they are kind of a no brainer if you are in my (our?) position, which is a desire to sell a stock anyway.
If AAPL is currently at $95 and I know that I am planning on selling 100 shares when it hits 97, I may be able to make an extra $400-500 just buy selling a covered call option with a $97 strike price.
I think you are misunderstanding this somewhat. If AAPL reaches the stock price, you will not automatically sell it at that price, but instead you have to wait for the option buyer or option expiration. Meanwhile, you are sitting on an investment that won't be making you any money. If the entire market moves up with AAPL while you're stuck holding those shares with no upside left, this can be a significant opportunity cost, since you can't yet buy what you were planning to.

The buyer did not pay for the opportunity of buying AAPL at market price if it climbs to $100, they could have had that for free. They paid for the opportunity to get the upside above $100 for little risk. Your transaction was not a no brainer. This is a common misunderstanding.
As the stock significantly increases beyond $100, the likelihood of being called away is actually very high (one does not need to wait for expiration).

In fact, can execute the transaction themselves, namely by selling the stock and buying the call back!

This is a good purpose of covered calls, when used correctly, as in this case. I see nothing wrong with it. The owner is happy to sell at $100. (really $109.70)

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Re: AAPL

Post by ogd » Wed Jul 09, 2014 11:26 am

airahcaz wrote:As the stock significantly increases beyond $100, the likelihood of being called away is actually very high (one does not need to wait for expiration).

In fact, can execute the transaction themselves, namely by selling the stock and buying the call back!

This is a good purpose of covered calls, when used correctly, as in this case. I see nothing wrong with it. The owner is happy to sell at $100. (really $109.70)
I agree with the first part, except for the part where you miss out on the "significant appreciation" and your money is stuck for quite a bit beyond $100.

Buying the call back will lose you money since it will have appreciated considerably, more than the stock unless very close to expiration. It's still an option, after all, so worth more than committing to the stock.

The last part I don't agree with. The owner cannot be sure of selling at any particular price. Again, the whole point of that option is the appreciation between $100 and the time of the sale, which the seller misses out on, together with the associated opportunities if the entire market moves up. Remember that the buyer is buying something with their money.

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Re: AAPL

Post by airahcaz » Wed Jul 09, 2014 11:38 am

ogd wrote:
airahcaz wrote:As the stock significantly increases beyond $100, the likelihood of being called away is actually very high (one does not need to wait for expiration).

In fact, can execute the transaction themselves, namely by selling the stock and buying the call back!

This is a good purpose of covered calls, when used correctly, as in this case. I see nothing wrong with it. The owner is happy to sell at $100. (really $109.70)
I agree with the first part, except for the part where you miss out on the "significant appreciation" and your money is stuck for quite a bit beyond $100.

Buying the call back will lose you money since it will have appreciated considerably, more than the stock unless very close to expiration. It's still an option, after all, so worth more than committing to the stock.

The last part I don't agree with. The owner cannot be sure of selling at any particular price. Again, the whole point of that option is the appreciation between $100 and the time of the sale, which the seller misses out on, together with the associated opportunities if the entire market moves up. Remember that the buyer is buying something with their money.
The delta will be very very close, and yes the seller ACCEPTS the fact that there is an opportunity cost and also downside risk, but in the end, by expiration, the stock above $100, they sell for $109.70. Stock below $100, they get the $9.7 TODAY and still hold the underlying, which the seller is perfectly happy to keep holding, as was mentioned.

The trade is fine.
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Re: AAPL

Post by airahcaz » Wed Jul 09, 2014 11:40 am

mich_bogle wrote:Thanks for the clarifications. I should probably have held off because I realized I did not have 100% understanding of how this transaction works, but I did run it past a friend who works at a brokerage for a sanity check before executing.

In the meantime while I wait for the option to either exercise or expire, I have an extra $970 to put to work in the market.

One other point where I'm confused... if the option gets exercised, is that being done by the exact same individual to whom I sold it, or can it be done by anyone?
ANYONE. It can be sold to another person, and then another, and another, right?

You don't need to worry about that at all, that's what brokers are for. :)
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

Post by ogd » Wed Jul 09, 2014 11:46 am

airahcaz wrote:The delta will be very very close, and yes the seller ACCEPTS the fact that there is an opportunity cost and also downside risk, but in the end, by expiration, the stock above $100, they sell for $109.70. Stock below $100, they get the $9.7 TODAY and still hold the underlying, which the seller is perfectly happy to keep holding, as was mentioned.

The trade is fine.
It looks relatively reasonable at this price. However, the trade consists of limited upside in exchange for keeping the entire downside of the stock. It should cost a lot, and I'm always concerned that I'm not in a position to tell how much it should cost better than the Wall Street shark that bought the option.

More importantly in this case, I'm concerned that mich_bogle did not quite understand what he was doing, believing that the stock will be called as soon as it hits $100. Not so.

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Re: AAPL

Post by Electron » Wed Jul 09, 2014 1:07 pm

Online option courses are available at no cost that are quite instructive. Highly recommended.

http://www.optionseducation.org/en.html

The catalog shows the available choices such as Options Basics, Covered Calls, and Volatility. After selling a call, I don't think it typically gets exercised as long as premium remains in the call. The call buyer would typically just sell their call position to close it out. One exception might be capturing a dividend.
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Re: AAPL

Post by airahcaz » Sat Jul 12, 2014 8:26 am

ogd wrote:
airahcaz wrote:The delta will be very very close, and yes the seller ACCEPTS the fact that there is an opportunity cost and also downside risk, but in the end, by expiration, the stock above $100, they sell for $109.70. Stock below $100, they get the $9.7 TODAY and still hold the underlying, which the seller is perfectly happy to keep holding, as was mentioned.

The trade is fine.
It looks relatively reasonable at this price. However, the trade consists of limited upside in exchange for keeping the entire downside of the stock. It should cost a lot, and I'm always concerned that I'm not in a position to tell how much it should cost better than the Wall Street shark that bought the option.

More importantly in this case, I'm concerned that mich_bogle did not quite understand what he was doing, believing that the stock will be called as soon as it hits $100. Not so.
Again, for mich, or anyone, willing to hold the stock long term, regardless if it goes down, perhaps rather significantly, or not, and also willing to sell it at $100 if they are 'called' away, a covered call is the exact trade for this, whilst taking in a decent premium of $9.7 per contract, or $970.
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

Post by minesweep » Sat Jul 12, 2014 9:47 am

mich_bogle wrote:
airahcaz wrote:
mich_bogle wrote:Two months ago AAPL represented about 50% of my portfolio. Now I am converting it to a boglehead portfolio and have sold off 75% of my holdings. It's been a busy month of selling. :)
Cause you started a long time ago, or did you decide to buy a decent chunk in the past few years?

I bought $500 worth back in 1992 and never sold any until last month. 700 shares post-split
Over the past month the price range of AAPL was between $90-$95/share. At an average $92.50/share, 525 shares was worth $48,562. 175 shares at $95.22 (7/11/14 close) is $16,663. Over 22 years that $500 investment grew to approx. $65,000. :moneybag :sharebeer

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Re: AAPL

Post by mich_bogle » Sat Jul 12, 2014 9:56 am

minesweep wrote:
mich_bogle wrote:

I bought $500 worth back in 1992 and never sold any until last month. 700 shares post-split
Over the past month the price range of AAPL was between $90-$95/share. At an average $92.50/share, 525 shares was worth $48,562. 175 shares at $95.22 (7/11/14 close) is $16,663. Over 22 years that $500 investment grew to approx. $65,000. :moneybag :sharebeer

Mike

Yep! :sharebeer
Little did I know that the wisest monetary decision on my life would be made when I was 11 years old (the story goes that I asked my parents for it because I was such a little Apple fan boy at the time)

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Re: AAPL

Post by minesweep » Sat Jul 12, 2014 11:50 am

mich_bogle wrote:
minesweep wrote:
mich_bogle wrote:

I bought $500 worth back in 1992 and never sold any until last month. 700 shares post-split
Over the past month the price range of AAPL was between $90-$95/share. At an average $92.50/share, 525 shares was worth $48,562. 175 shares at $95.22 (7/11/14 close) is $16,663. Over 22 years that $500 investment grew to approx. $65,000. :moneybag :sharebeer

Mike

Yep! :sharebeer
Little did I know that the wisest monetary decision on my life would be made when I was 11 years old (the story goes that I asked my parents for it because I was such a little Apple fan boy at the time)
When I was 11 years old the only stock that interested me was on the shelves of our food pantry.

Mike

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Re: AAPL

Post by ogd » Sat Jul 12, 2014 12:48 pm

airahcaz wrote:Again, for mich, or anyone, willing to hold the stock long term, regardless if it goes down, perhaps rather significantly, or not, and also willing to sell it at $100 if they are 'called' away, a covered call is the exact trade for this, whilst taking in a decent premium of $9.7 per contract, or $970.
The way you phrased this only perpetuates the misconception that I was talking about. The right way to phrase it is "be willing to sit on a risky asset with zero rewards for months after the stock passes $100". The period between that milestone and you getting to use the money is the entire value of the option. Ignore it and the option looks like free money at any price. Which it isn't.

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Re: AAPL

Post by Electron » Sat Jul 12, 2014 1:20 pm

One key decision in selling the covered call is the expiration date. One could sell a call expiring next week or as late as January 2016. The difference in premium will be significant. The strike price is the other key factor.

It is easy to regret selling a covered call in a bull market or anytime the stock price moves up. In fact, if the stock moves up right after selling the call you may wish you had done nothing. Note also that short term capital gains may be realized if the option expires worthless. Lastly, there is the opportunity to buy the call back at a loss should the stock move up significantly. That could be advantageous in certain cases.
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Re: AAPL

Post by airahcaz » Sat Jul 12, 2014 1:27 pm

ogd wrote:
airahcaz wrote:Again, for mich, or anyone, willing to hold the stock long term, regardless if it goes down, perhaps rather significantly, or not, and also willing to sell it at $100 if they are 'called' away, a covered call is the exact trade for this, whilst taking in a decent premium of $9.7 per contract, or $970.
The way you phrased this only perpetuates the misconception that I was talking about. The right way to phrase it is "be willing to sit on a risky asset with zero rewards for months after the stock passes $100". The period between that milestone and you getting to use the money is the entire value of the option. Ignore it and the option looks like free money at any price. Which it isn't.
Do you do many covered calls? I trade options leaps spreads, and the risky asset is owning the stock. Period. The stock holder wishes to hold the stock no matter what happens. Period. The stock owner wishes to take in some premium and be forced to sell if the stock exceeds 100.

What you're arguing is that the stock is a risky asset. What you're not doing is providing any advantages to covered call writing, as if it should never be done, nor are you providing any alternatives.

Not sure how that's being helpful, as sophisticated an options trader as I am, I'm always willing to learn, so do tell.
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

Post by ogd » Sat Jul 12, 2014 1:46 pm

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.

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