Originally posted by melloThis just pisses me off. I finally have some money to invest so I buy 136 shares
at 51.19. Then the announcement of Apple's best quarter ever which I think
is great news, & now I hear there was a friggin' 11% slide in after-hours
trading! Fate & timing keep screwing with me. When the iMac first came out I
wanted to buy but I was a broke college student. I was going to buy Apple
stock when it was at $14 but then my car up & dies on me. So instead of putting
ten grand in stock I put a downpayment on a car. That ten grand would
be worth something like $100,000+ today. To this day... I curse my old car for
I hear you, but there are two techniques you could consider, one risky, one not so much.
For the less risky investment, use an opportunity such as this to "average down" on the stock. Never put all your money in a stock without some reserves to do this. Averaging down means buying more shares when the price goes down, so your overall target price for profit is lower. For example, if you bought 136 more shares now at, say, 47.00, then Apple stock would only have to return to 49.10 before you're even again (minus commissions, of course).
The riskier method but also the potentially more rewarding, is to trade Apple options instead. Explaining the options market is too much to go into here, but you could buy puts (a bet the stock will go down) and calls (a bet the stock will go up) at the same strike price, let's say 50 in this example, and hope that Apple stock moves enough in one direction or the other to cancel out the put or the call option that decreases in price. I won't know until the market opens tomorrow, but the 50 call will probably drop from 3.00 (cost $300 per call option) to under 1.00 (let's say to .50, call it a loss of $250). However, the 50 put option will likely increase from 1.45 (cost $145 per put) to well over 4.00 if Apple stock opens at $47 or lower. That's a profit of over $350 on the put, possibly even more if the stock trades lower. I'm just guessing here, but it illustrates the point. The more puts and calls you buy, the more money you can make (and lose). That's a very quick and dirty explanation, but hopefully it illustrates one way to beat a stock plunge on an earnings report, as well as profit from it if it goes up. This technique would have worked well after the April earnings report too when the stock tanked.
Now, before anyone gets into the options market I recommend highly that they read up about how to use them and what the risks are. You can lose all your money quickly. If you get into it without doing your due diligence first, then I can only say "a fool and his money are soon parted."