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July 22, 2012 / redman59

Trading Around AAPL

Going into yesterday I was long only one position with AAPL. Unfortunately this was a laggard through the day and the action was not impressive at all. With the market being up yesterday and AAPL under performing I decided to adjust the position taking a loss on the original. I was long the June weekly/July Calendar and I rolled the position down from the 590 strike to the 580 strike. Also toward the end of the day I decided to add a weekly put option, giving me a risk graph as seen below:

This will capture any gap down should we open down. Looking at the pre-market that is not the case as AAPL is currently trading +3pts. I put on the weekly option with the intention of removing it if we close above yesterdays last hour high. My thoughts for all of this had to do with the under performance in AAPL with the market making the move it was. Also I am still bearish here as the SPX couldn’t close 50% above yesterdays move. So with my bearish outlook and the performance of AAPL I decided to take on a position that is net short, but will remove based on the first hour of trading.

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