Small play I closed out of this week (APPL) for a 2K profit
This week I made another 2K in APPL.
How?
o I bought this dip in late December after selling the bounce up after the EV news story was reported. I went with:
o (1) 125C exp. Feb 2020.
Premium: 5.50
o (1) 125C exp. June 2020
Premium: 12.00
Reasons why I went long
Thesis
a. January 27 earnings as a catalyst
b. Strong iPhone 12 demand
c. Hardware demand propelled by Covid
d. Continued services growth
e. Increased demand in China (Huawei struggles)
f. Transition to Biden Administration, we can speculate this will positively effect companies with significant China exposure as he is less hostile to Beijing than his predecessor
o In late December through early January the tech as a sector lagged, while there was a considerable run up in value stocks, EV’s and genomics. I was confident there was some value to exploit in tech at the time my trade was executed.
o On 1/26 I was able to cash the trade in for a profit of around 2K each. I didn’t want to hold through earnings as I am not a fan of binary events. I love taking my profits! While I think Apple is likely to report a tremendous quarter, the market looks weak. I will look to re-establish a position if we see a “sell the news event” or any significant dip.
o In other news we are seeing a tremendous amount of money being made in Game Stop (GME) and AMC Entertainments. I am kicking myself because I came close to buying AMC calls when the stock was close to $3.00 its now north of $18.00. In times like this it is important to avoid FOMO and remember that, in the market prices fluctuate every day, meaning that there is always another opportunity and missing one is not the end of the world.
o If anything I want my blog to show proof of the assertion that the sexy plays are not always necessary and a good deal of money can be made off of vanilla stocks like AAPL, where you don’t have to lose sleep over volatility, or walk around knowing that you are invested in a speculative play with no fundamentals. I love value! Why not look a Disney (DIS) or Boeing (BA) large caps on a dip? I am looking at buying a combination of underlying and LEAPS on both as part of a reopening play.
