Quote:
Originally Posted by
herbapou 
The stock should open around 450 tomorrow.
Yep I have 20k in. But I don't see any other way to make money with options than go 3 to 6 months from expiration and $20+ ITM. Its costly but it gives both Theta and Vega protection. Theta in the last 3 months from expiration is too big if the stock doesn't go you're way and you need to wait for a come back. Vega is going to tank tomorrow for all out of money options, no matter what is the expiration date is.
Playing the FEB/weekly before a big event is like playing at the casino. And the weekly premium drop is going to be brutal by tomorrow at close, which could eat up you're profits event if the stock went the right way.
I expect a possible retreat in the coming weeks before it starts to go back up again. I am going to get rid of my FEB/MAR calls and roll up my AVR/MAY calls after the premium drop. This will take a big amount of money out and secure a profit while still giving me 400 shares exposure in LEAPS. Could be a good idea to buy one MAR put.
Thanks for replying me.
I totally agree on theta and vega as I saw my position not increase two earnings call ago although my out of the money options were supposed to double at a $10 increase in stock about two earning calls ago.
Nonetheless, I didn't see that much volatility prior to this earnings call, meaning that the volatility around 425 actually decreased during the day due to a decrease in stock price.
On this, I was reading a very interesting article today :
http://seekingalpha.com/article/3207...at?source=feed
I can't afford to trade in the money apple options yet. Nonetheless, my strategy on out of the money options is similar to your in the money one. Buy at least a month before the earnings to protect from the vega. I buy 3 month options and keep them for max 1 month. Within that month most likely they will double in price if the stock goes the way I expect, or if not at least the value doesn't drop to 0, but rather stays at around 50% loss. Which makes the whole strategy profitable.
This is why I started my position 1 month ago.
But you mention this is your first options trade? This is amazing! Congrats again! I live in Montreal too, if you want PM me and we can further discuss strategies.