$AAPL Options Action web extra trade - scott

5 oct - this might be one of the goofiest trades yet.. goofy because of what scott is saying in his description, heres the web extra clip AAPL clip . viewer in a nutshell is worried about his aaple stock and thinks he should sell and instead buy a July 2013 660 call  (which is going for about $7400) .. lets make an assumption that Joe Viewer has 100shares . Instead, scott recommends to:

Buy the Jan 700 call for $30 ($3000)

What gets me is the phrase that by buying this call "i am protected to the downside if AAPL continues to fall".. how is that exactly? your $3000 goes down as apple continues to fall... saying you only spent $3000 on an option vs owning the stock and it goes down does not equal protection.. you just lost less. "but has to rally a bit before i get to participate again" he says next.. so thats the position you want to put yourself in ?? you think the stock is going down so you buy a call and it will still lose money and then you need it to rally a bit? seems really bass akwards thinking to me. how about this... since mr. viewer is worried about the downside.. keep the stock and instead do a put spread collar.. the Nov 675 / 650/590 collar . as in sell the Nov 675 call for about $20, then use that cash to buy the Nov 650/590 put spread for about $20.. so zero cost to get you $60 of downside protection...thats what i think of when i hear "im protected to the downside". also gives you $25 more upside potential. the thing is i think scotts trade will make money but im not buying the explanation..would use that $3000 and buy call spreads closer to ATM instead.see all of scotts on air trades in this google docs spreadsheet

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$FB Options Action trade - dan

28 sep - if you read dans write up on his website on this trade you will see he mentioned that he is not buying the stock here to do this trade. that was not made too clear in the Facebook clip . so like i said before, just because you see it on air does not mean there is money behind it.. so its a bit deceiving when he says "i bought this and i sold that"

Buy the Jan 24/27 call ratio for zero (buy one 24, sell two 27's)

I like ratio spreads, they have a very high probability of being profitable, i prefer to do them in a series of monthly ratios vs going out 3-4 months. this can also be used against an ITM call not just stock. what scott does not do a good job explaining with useless comments of "the options math is against you" is that you will not see those full profits till the Jan opex...since you need the 27short calls to decay, they will more that offset the gain of the 24call in the near term..so be prepared to wait 3 months. see all of dans on-air trades in this google docs spreadsheet

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update to $HAL Options Action trade - mike

26 oct - been about a month since the trade was featured on -air and blamm, out of the blue a mike khouw tweet about a trade adjustment. first off, the Jan37 call is going for about .40 now.. so 60% loss so far with several months to go for opex.. per mikes tweet:

Michael C. Khouw 

Converting my long HAL call to a risk/reversal by selling Jan 30 puts @ .92.

pretty self explanitory, now selling the Puts to help finance the previously purchased calls. so as long as stock is above 30 at opex the "trade" will only lose 8cents. interesting way to leg into a risk reversal.

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28 sep - on the show on friday mike khouw and carter worth again for a trade, heres the clip HAL clip . a discrepency on this trade..mike SAYS to buy the Jan 36 call, so does the transcript, but the graphic shows the jan37 call.. when i looked at the options prices after hours...the pricing lines up more with the 37strike so im going with that..just a note, just because a "trade" is featured on the show does not necessarily mean they put their money where their mouth is..i get the feeling based his tone and the phrasing that he did not actually put this trade on.

Buy the Jan 37 call for $1.00

pretty simple trade, bullish thesis, so buying an upside call.. as usual when going out a few months like this i would recommend to make it a calender spread instead to lower your cost basis a bit..not a lot of premium with HAL but right now could sell the Oct 37 for 12 cents...so would lower cost basis 12percent. Easy Peezy. see all of mikes on-air trades in this google docs spreadsheet

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