From $10,000 to $100,000 in 6 months.

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grutrader saw a $3 premium on the ATM call and figured it's a sure thing to be bailed out in stat-vol. Problem is, he had no idea that there was a $3 dividend payment tomorrow.

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The above conversion (mid used on the 3-way) is forecasting an open on AAPL of 589.23, excluding exogenous factors (index futures).
 
bigsnack said:
I don't know diddly about options... does this mean he's going to lose the rest of his cash? :cool:
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hard to say. he is down about 60 buck a contract with his breakeven a little over 595 so the mkt could make him whole he has till friday afternoon.
 
bigsnack said:
I don't know diddly about options... does this mean he's going to lose the rest of his cash? :cool:
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If AAPL opens as forecast by the conversion his premiums will take a hit on the open. He still has until Friday's close for the stock to move higher. Looking at the chart, I would say that if AAPL can stay above 586, then 600/604 would remain in play for a retest. If that materializes, the premiums would recover, and he would likely have an opportunity to sell his options for a profit. If 586 goes and AAPL doesn't bounce back quickly, then 582/572 comes into play as a potential downside targets, and if that materializes then yes, unless he sells out to salvage some remaining time premium, he will lose the cash he used to purchase the options.
 
bigsnack said:
I don't know diddly about options... does this mean he's going to lose the rest of his cash? :cool:
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If apple doesnt rise on friday. This gap down will crush the option price.


At least this guy put his fills in as he got laughed out of here. All he had to was take a stop loss at 3580-75 area and still had some cash in the account to do something with. Thats a good learning lesson for people :)

I usually don't hate on people, but this kid is obviously a cocky D bag, who puts a amex statement on their twitter? WTF??
Looks like he will have about 1500 left to do something with :D
 
bigsnack said:
I don't know diddly about options... does this mean he's going to lose the rest of his cash?
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He is down another 15% today, on top of yesterday's 62% loss. The thing is, even if both of these trades were winners, they would still be bad trades. That's because of his position sizing and bankroll management which virtually guarantees the ruin in the long run. It's very easy to see with the basic knowledge of probability. So, the answer to your question is, "yes".
 
lotto said:
If AAPL opens as forecast by the conversion his premiums will take a hit on the open. He still has until Friday's close for the stock to move higher. Looking at the chart, I would say that if AAPL can stay above 586, then 600/604 would remain in play for a retest. If that materializes, the premiums would recover, and he would likely have an opportunity to sell his options for a profit. If 586 goes and AAPL doesn't bounce back quickly, then 582/572 comes into play as a potential downside targets, and if that materializes then yes, unless he sells out to salvage some remaining time premium, he will lose the cash he used to purchase the options.
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The div is priced into the synthetic, so it is mostly a moneyness issue. The call delta was not 50 when ATM. The shares are going to open lower, by the amount of the div, barring any bullish news, index, etc.
 
drownpruf said:
The div is priced into the synthetic, so it is mostly a moneyness issue. The call delta was not 50 when ATM. The shares are going to open lower, by the amount of the div, barring any bullish news, index, etc.
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So it is sort of a "lack of moneyness" issue for the OP, in more ways than one. I'm an optimist at heart, so I'd love to see AAPL pop to $604 early tomorrow and bail the OP out rather than flush to $572.
 
lotto said:
So it is sort of a "lack of moneyness" issue for the OP, in more ways than one. I'm an optimist at heart, so I'd love to see AAPL pop to $604 early tomorrow and bail the OP out rather than flush to $572.
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He's got a decent shot. AAPL tends to perform well on payment dates.
 
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