Should I panic about my short position on Apple calls?

[bwolinsky]

Quote from stevebearman:

I thought I was playing it safe when I sold 90 Feb. 2012 Apple calls at 470 strike price. Apple announced earnings today, and its stock rose from 420 to 450 in after hours trading. What are the possible approaches?

If I want to speak with an expert and get their advice, who would you recommend? How do I even find people to talk to online?

Thanks in advance!

Seeing $475 before 11 days here. No more than $500 but way more than $470 per share.

 

[noob_trad3r]

ohoh its in the money by 93 cents.

 

[Ghost of Cutten]

 

[zdreg]

the op, the bearman, is hibernating in his cave. he will have an unpleasant surprise when he wakes up. interesting that he has not commented since 1/27 on his position.

 

[noob_trad3r]

Maybe the Greeks will save him this week. If they mess around he might get lucky and the call goes OTM by a few pennies.

 

[zdreg]

Quote from noob_trad3r:

Maybe the Greeks will save him this week. If they mess around he might get lucky and the call goes OTM by a few pennies.

the same way the greeks are going to save the euro.

the same way noob_trad3r is going to send him a GOOD check to meet his margin call.

 

[noob_trad3r]

Quote from zdreg:

the same way the greeks are going to save the euro.

the same way noob_trad3r is going to send him a GOOD check to meet his margin call.

ohoh, 2.82 ITM I think it is time for panic.

7.90 + 2.65 (+50.48%)

 

[ForexForex]

 

[Churchill]

Quote from noob_trad3r:

ohoh, 2.82 ITM I think it is time for panic.

7.90 + 2.65 (+50.48%)

At this point, in my estimation the initial position would require around $100K of extra margin to not be forced to sell. As stated earlier, selling OTM options, be it calls or puts, is not free money.

Hopefully he sold already, but if not, it is an expensive lesson.

During the 2008 and early 2009 meltdown, I sold OTM puts on some large Canadian banks never thinking I would be filled. I did get filled. I had the required margin and held long enough to break even and a little more, but was sweating in the mean time and learned that lesson the relatively easy way, thankfully.

But as to the OP, selling uncovered calls is dangerous. Theoretically unlimited loss and as opposed to being straight up short, it is leveraged.

 

[Churchill]

Quote from ForexForex:

That is cruel, yet creatively funny. I see that there are no sholders to cry on here at ET.