aklucsarits

I sold all my stocks to short silver.

























Just kidding.
I haven't bought or sold anything recently. I might have to add to my CSCO holdings at these prices though!

Andrew

magician

I was working all day: did silver hit $15 (or $51) without anyone telling me about it?

Cyberous

Oil prices are not good.

Jim Reichard

I have a large gain in Apple. My broker feels I should sell at least half of it. I am hesitant to sell any of it as it still looks good to me. What do you smart money guys feel about it?

Trent06

if theres money to be made, make it

Sfedai0

Ive been long Apple for awhile. I would take the advice and sell some and reinvest it elsewhere.

circuit-racer

Check out the weekly options on AAPL.

You can sell in-the-money or out-of-the-money covered calls if you don't mind selling. AAPL has had a lot of selling pressure so find a position with a delta that makes sense for your specific goal.

I'm an IA who has suggested diversification out of AAPL for months but feel it still has some legs....earning season so be smart guys and gals.

Want to protect your investment? Try a cashless collar (sell a call and buy a put).

magician

For those here who don't have your financial background, you might want to explain an option's delta.

circuit-racer

Sure thing, derivatives are a daily thing for me and sometimes I forget they are not common to all.

Delta is the hypothetical pricing on call and put options. If AAPL stock is trading at $328.41 and you look at the weekly Apr $335 call expiring on Apr 21st trading at $4.90-5.00, it currently carries a delta of 0.38 . This means that every dollar AAPL moves, hypothetically the call option price will move 38 cents. Typically this is a baseline and it never correlates perfect but it gives you a good idea going into the trade of what to expect. So in this instance AAPL moves $3 down on Monday, the option price should move from ~$4.90-5.00 to ~$3.76-3.86 and if AAPL is up $3 Monday it would be ~$6.04-6.14. It would be close to those numbers but not exact.

If you are OK selling AAPL and have 100 shares, you can sell this call (1 contract = 100 shares) to give yourself an additional $5 to the downside. If AAPL continues down you now offset $5 to the downside. You give up the upside to do this and offer your stock to the market at $335 plus the $5 you may have collected selling that call option. I would only do this if you are OK selling shares but don't mind holding long term if AAPL takes a dip.

The closer the delta is to expiring the closer to 1 it gets. If you want to try to trade an option off volatility then a higher delta will hypothetically allow you to sell and then buy back the call for a short term gain on just the option. This could have been done yesterday on that AAPL weekly $335 call and bought back today for a small gain of around ~$1.50 per share.

There are other greeks (gamma, theta, vega) involved but I think that's enough for right now.

This is for reference purposes and I take no responsibility for trades placed off this information.

magician

More specifically, delta is the change in price of an option relative to a small change in price of the underlying; it’s the derivative (as in calculus) of the option price with respect to the underlying price. For call options, delta ranges between 0 and +1; for put options, delta ranges between -1 and 0. The more out-of-the-money the option, the closer delta is to 0; the more in-the-money, the closer delta is to +1 (for calls) or -1 (for puts).

Here's a graph of the price of a call option for differing prices of the underlying (click the image for a larger view); the slope of the dashed red line is delta:
[attachment=660:Long Call Option.jpg]

Here's a graph of the price of a put option for differing prices of the underlying (click the image for a larger view); again, the slope of the dashed red line is delta:
[attachment=661:Long Put Option.jpg]

It isn’t exact because as the price changes delta changes, and there are other effects as well (e.g., time to expiration keeps getting shorter).

Notice that the call is out of the money (you wouldn't exercise it and buy AAPL at $335 when you can buy it on the open market at $328.41), and that the delta is closer to 0 than it is to +1; this is consistent with the example call option pricing graph above.

If the option is in the money, the closer the option is to expiration, the closer delta will be to +1 (calls) or -1 (puts); however, if the option is out of the money, as it nears expiration, delta moves toward 0.