Put your hand on a hot stove for a minute, and it seems like an hour. Sit with a pretty girl for an hour, and it seems like a minute. That’s relativity. – Albert Einstein
Apple’s down 2% on the day which takes it down a full 10% from its recent all-time highs. Recall that we’d been selling a good bit of our Apple calls while the stock was at the highs and since then I’ve been patiently waiting for the stock to pull back harder than it has been. Indeed a couple weeks ago, I wrote:
I do not think that there’s “enough fear” to be getting aggressive in Apple after it simply pulled back to where it was trading just a couple weeks ago. You know that I will be pounding the table, jumping up and down and screaming about buying stocks and getting aggressively long when the markets are in panic/fear mode next time. This isn’t it.
I’m not sure that we’re seeing much panic in Apple’s stock yet, but we are definitely seeing some fear rear its head here in Apple. We buy when others are fearful, right? And we sell when others are euphoric, right?
I’m not going gangbusters or buying back all the calls I’ve sold at higher levels, but I am going ahead and starting a buying tranche approach to building back up the Apple exposure again.
Recall that when I sold those Apple calls for those huge gains back when the stock was running towards and hitting $700 a share that I talked about how when I would look to buy Apple calls again that I’d buy longer-dated and higher-strike price calls than I’d been selling. That way I keep a big chunk of my profits from the prior Apple calls I sold, but I get my upside leverage opened up again if the stock is to run back to new highs.
I’m bidding at the market and slightly under the market for some Apple calls with strike prices near $700 or below and expiring out in April 2013.
No other trades for me so far today.
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