Closing my first trade 🎊
Apple Inc. Oct2016 110 C — Long To Open 1 @ 0.67 USD
On the 12th of July I bought an $AAPL option contract, with a strike price of $110 and an October 21 expiry date. The current stock price was $97.50 and the contract cost $67 to open.
I consider $97.50 to be a low stock price and a company like Apple belongs closer to $115 in my opinion. If you take a deep look at the fundamentals it’s hard to underestimate the enormous potential this company has. And who isn’t excited about the upcoming product launches this fall?
With this in mind, I think the strike price of $110 is a reasonable target within October. However, Apple had an upcoming earnings report which I really haven’t considered in my strategy. My uncertainty around this event made me look for a profitable exit ahead of the earnings report. If this wasn’t obtainable, then my plan was to keep my position.
Ahead of Apple Q3 earnings, the stock peaked above $100, falling straight into my strategy, which I then decided to execute.
Looking at the graph below, you will see the Apple stock price from 12th of July to 21st of July. On the last day the spike travels well beyond $100; this is where I closed my trade.
Selling the ticket for $115 with an investment of $67 and a return rate of 70%, left me with a profit of $48 (comissions and fees not included).
Considering that I held this position for only 9 days (low time decay) and I avoided the uncertainty of the earnings report, I can say that I am happy to close my first trade with a return rate of 70%.
