Sultry Sunday Night Post

Anna here Gang

Good Sunday night, I hope everyone has a great weekend! Finally chilly here in Florida and couldn’t be happier! Mole is still working his butt off, so he asked me to post a sexy picture, so I will have to oblige. 😀
but first let me put up a risk graph for APPLE. Earnings are out tomorrow after the bell, so I picked out a juicy low risk high reward call spread. I still see Apple hitting 202 before retracing along with the overall market. Now on this graph the risk is at the lower left hand bottom of the chart (very small) and the reward is the line that nicely goes up to show you a vertical call spread, if it were a put spread the lines would be turned the other way.  Apple historically moves about 8%-9% during earnings one way or the other.

Now for those of you who would like a higher a closer to the money strike on your long call here is the 190/195, but as of right now the Delta is the same for both trades so why put on more risk, Well some say that the probility of the trade being successful is higher.

It is what your risk tolerance is, but whatever you do, DO NOT PUT ON A STRAIGHT CALL OR PUT TOMORROW. You will pay top dollar for that option. The MM’s pump up the volume before earnings so you get to pay more $. (nice of them huh) and once the earnings come out, the MM’s pull that IV right out of that option, so your successful trade will either get a small or an huge IV crush, that will affect your profits even if you are right on the direction of the trade. If you really feel comfortable buying straight options before earnings you must do it about 2/3 weeks before earnings come out.

So now for the girl who wants to take down that bull. I do believe we are close to an intermediate top, but will have to fill the 1121 gap to really get a meaningful retracement. But I am ready to ride that bull so here is my little outfit for that ride (wink wink) 😉