Apple has fallen from $525 to $500 in the last few days. I am looking to do a call spread on Apple the jobless claims were positive news for the fourth week in a row and the market may get some upside from this.
This trade makes the most money when Apple stays above $460. This is to hedge our SDS & BAC positions. If all goes well we will make money on both sides.
If the price goes down we get to buy Apple shares at $463 each. I am extremely happy to buy Apple at $463.
Buy the Apple (AAPL) March, 2012 $430-$460 call spread for a net cost of $26.00.
Portfolio weighting: 10% when in the money
($10,000/100/$26) = 4 Contracts
2 trades are required:
1) Buy 4 x AAPL120317C00430000 at $72.00 or best
2) Sell 4 x AAPL120317C00460000 at $46.00 or best
Total cost 2600 x 4 = $10,400
Best Regards,
Robert McManus
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