"will re-short AAPL spreads this week - do you use spreads for the high flyers? It helps control risk and margin, but losses can be larger if stock moves whole range. I took several small losses as I shifted AAPL positions only to have stock move back into original range I used from earlier in the week and then penetrate my short puts area for all of 15 minutes. Kept me on high edge all week and ate 50% of time for 10% of exposure and profits. And I mis-traded removing a late hedge at worst point (decided peg level had moved to 600 from 595 and took losses on a 595 short call hedge against my 595 puts only to have stock come right back in - ugh)."
Hi Jon,
I had an AAPL weekly strangle 540P / 660 C expire last week credit of about a buck along with some short 635 calls. Shows you my taste for getting too close to the flame, but just used my available margin to generate a few bucks of income for what I perceive as fairly low risk, also have some 645 calls short for 03/30. In trying to trade the peg, its not too much of my game anymore with the high flyers and don't want the margin exposure too close to the strike at this time, but thats just me. CRM just another momo along with LULU and many others and there is just so much risk and margin that I want to use so I have stayed away from them for now, last traded CRM when it was under 100, but haven't played lately.
I did read Citron's writeup of QIHU and see many valid points, but no play there either for me as put prem is just a bit too high to buy as well as I don't want the risk of selling NP's if it all falls apart or naked calls to get squeezed. SOHU, have traded in the past and being that its a real company feel a lot more comfortable position trading a piece.
Stocks like BKS that are subject to random buyins being heavily shorted aren't my favorite either as I don't like feeling like an orange going into the squeezer, just my opinion.
I have also used your trick of writing an offsetting option to flatten a position prior to expiration and yes, you can probably get a better result a lot of times by doing this rather than buying back the options and getting hit with the commish and spread, not always, but works ok.
Good trading
dealmakr |
