Trade Alert – Tiny fruit and more RIMM puts trim

It’s the first new week in the new year and it’s already feeling awfully volatile out there.

Speaking of volatile, how annoying is it when people confuse “volatile” with “down”.  We can have a wildly volatile bull market just as easily as we can a wildly volatile bear market. The wild blow-off top tech bubble rally in 1999-2000 was about as volatile a time as ever has been. But the markets doubled and more during that volatility.

Anyway, Apple was down 2% early and now is back to almost even. I put in some bids for some Apple calls when it was down and got filled on a tiny bit of them, April $600s or so. Not even a full tranche of a buy, but I’m leaving the bids out there below the market and if the stock drops again mid-day, hopefully I’ll get filled on more of them.

Amazon is at an all-time high. Much higher than it ever got back in the aforementioned 1999-2000 blow-off top tech bubble rally. Apple is higher than it ever got in that bubble too, by the way, by several factors. Meanwhile, Lucent, Level 3, Brocade and others are down more than 99% since those bubble days. Microsoft is still half its peak-price from that bubble. Fundamentals matter over time.

I’m sticking with my Amazon common and calls for now, after having taken some nice profits on a few of those calls last week. Of course I wish I hadn’t sold any of the Amazon and Sandisk calls that I trimmed now that the stocks have continued to climb, but that goes back to that old lesson I often cite that we’ll never catch the exact bottom with our buys or the exact tops with our sells and that’s not even the goal. Maximizing our upside potential and minimizing our risk for loss is the only truly attainable goal for any investor and trader.

I’m also going to go ahead and sell most of the rest of my RIMM puts that I bought before the earnings report crashed the stock. We’ve still got big profits in them and I’m worried that the stock could rally into the hype of the actual rolling out of that stupid new OS they’re going to try to save their company with. In other words, I’ll look to re-enter these puts on strength, maybe if the stock gets over, say, $15 or so.

Go confidently in the direction of your dreams. Live the life you have imagined. – Henry David Thoreau