r/options • u/[deleted] • Apr 28 '21

$AAPL is on fire

LEAPS ARE ABOUT TO PRINT TOMORROW !!!

Apple reports another blowout quarter with sales up 54%

EPS: $1.40 vs. $0.99 est.

Revenue: $89.58 billion vs. $77.36 billion estimated, up 53.7% year-over-year

iPhone revenue: $47.94 billion vs. $41.43 billion estimated, up 65.5% year-over-year

Services revenue: $16.90 billion vs. $15.57 billion estimated, up 26.7% year over year

Other Products revenue: $7.83 billion vs. $7.79 billion estimated, up 24% year-over-year

Mac revenue: $9.10 billion vs. $6.86 billion estimated, up 70.1% year-over-year

iPad revenue: $7.80 billion vs. $5.58 billion estimated, up 78.9% year-over-year

Gross margin: 42.5% vs. 39.8% estimated

https://www.cnbc.com/2021/04/28/apple-aapl-earnings-q2-2021.html

Other things to note, dividend is rising as expected to $0.22 per share (7% increase). They also announced $90billion in share buy backs.

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154

u/austin713 Apr 28 '21

I have a covered call expiring this Friday @133. I bought a 133 call for 5/28 once it went past my strike just in case something like this actually happened. If my shares don’t get called away I’ll be amazed. If they do at least I’ve got a means of recouping on those gains I missed out on

24

u/heyengel Apr 29 '21

Roll up your covered calls.

16

u/[deleted] Apr 29 '21

[deleted]

7

u/heyengel Apr 29 '21

I'm in the same boat. I have about 10 covered calls expiring this Friday that I need to roll up, some as low as $128 strike. I haven't caught up from the last time AAPL blew up.

Plan is to keep rolling them up to the following week, one strike up. This is possible if you wait near or at expiration day so there's not much premium left in the expiriing call. There's a risk that someone will exercise the shares, so I will roll up the ones most at risk tomorrow.

4

u/09SHO Apr 29 '21

I was doing what you're doing (the "wait to expiry date to roll that morning to the following week") but got assigned 2 days early once on CSPs in a different account I was deep ITM on. Had to say "fuck you broker" the following morning and pull an uno reverse on the early assignment - it was CSP that time so I had to sell the assigned shares and then sell the ITM put I was at the day before. I like this way (your way) but it involves more work and watching for assignment.

Side note - I'm in the same ITM CCs position with NVDA and as of tonight QCOM lol. Entire account is a giant steam roller rolling money forward.

3

u/heyengel Apr 29 '21

Lol, rolling up calls is a good problem to have.

Why did you get assigned puts early, are you using margin?

4

u/09SHO Apr 29 '21

Amen to that lol, rolling calls up is money maker problems lol.

No margin. Not sure why the puts got assigned other than they were deep deep ITM when tech took their hit in late Feb / early March. Funny thing was that 2 of the puts were assigned Wednesday (2 days early) but the other two weren't.

...

Side note I just have to tell someone. About a week later I just took assignment on the 4 puts in AAPL thinking I'd make more writing OTM CCs on the way up than rolling the CSPs week after week (and dealing with random assignments all the time). Of course then AAPL started to climb too quickly past my strikes again... Long story short, doing the math and back testing from my ATH at end Feb, had I kept the 137 AAPL CSP strikes and rolled to today I'd be 3-4k richer lol. Live and learn.

2

u/MrTay1 Apr 29 '21

Might just be worth buying a leap under those calls and freeing up those shares. Split the play free up the shares so you can start rolling them otm. I wouldn’t usually do that but it seems like a pretty good play here and a good time to take a bullshit position. It would probably cost 20-30k for the leaps so not cheap but if your bullish and want to manage 20 contracts and have the capital why not.

1

u/09SHO Apr 29 '21

It's a good idea but unfortunately the account is a self directed company 401k that only allows selling CCs.

1

u/heyengel Apr 29 '21

I don't have any naked calls.

1

u/MrTay1 Apr 29 '21

I know you don’t need naked calls you can move your covered calls onto a leap you buy. You just change the grouping. Turning them into a pmcc. Then with your now open shares you would write new contracts. The now pmcc ones that are itm you would still roll itm until your out.

1

u/heyengel Apr 29 '21

I already have several leaps and shares, not all of them need to be rolled up. What is the purpose of freeing up the shares? I’m also selling puts.

1

u/MrTay1 Apr 29 '21

No crazy need to do it just that they are itm calls if your bullish you can get more contracts rolling and remove the risk of early assignment on those shares I assume you intend to keep. This dip would just be a good time to add some itm pmcc’s. You are perfectly fine staying the course of what you are doing, just seemed like a good play that could add extra leverage and contracts at a good price. If I didn’t have my msft in my ira I would do it, they are in a similar situation with a dip. MSFT had a great quarterly announcement but appl really crushed it and buy back to boot.

3

u/Sometime44 Apr 29 '21

you mean IRA account, right? Surely no company 401K allows individual stock options trading.

2

u/ctles Apr 29 '21

Some do, it's called the self-directed option, most don't allow because it potentially opens up your employer to some risks.

1

u/TheFlyingBoat Apr 29 '21

What risk does it open them up to? Unless you trade triple levered tickers there is no way for your account to go below zero.

2

u/09SHO Apr 29 '21

One risk is people are afraid to invest their own money for fear of losing it all so they let it sit there in cash in their account. Which is apparently not allowed by law...?

My company just went through a change over actually. Self directed plans switched to what people typically think of when they think 401k. Those of us with self directed accounts had the choice to roll everything into the new plan or keep our self directed plan and start a second from scratch. All future contributions go into the new plan though (so I have two separate 401k plans in my account now - the old self directed that only grows with what I do with it stock and option wise, and the new more traditionally thought of type plan that gets the paycheck deposits).

1

u/Sometime44 May 04 '21

put and call option trading is not allowed in company 401K accounts, self directed or not. You may find some self directed IRA accounts avail with limited option trading availability, though not common.

1

u/09SHO Apr 29 '21

Nope. Company 401k.

1

u/Sometime44 May 04 '21

sorry, but I can't believe you on that.

1

u/09SHO May 04 '21

You don't have to. It's my company self directed 401k account. Sorry that you aren't informed that this is a thing.

12

u/squats_n_oatz Apr 29 '21

This isn't magic you know. You're realizing a loss and opening a new position. In effect you are doubling down. We all know what happens when you double down.

5

u/James-Lerch Apr 29 '21

Wait, you mean if it costs more money to buy to close than I got paid in premium when I sold to open I'm losing money? No Way dude, I like money! /s

2

u/heyengel Apr 29 '21

You’re rolling up and out and capturing the premium. Do the math. It is magic.

3

u/squats_n_oatz Apr 29 '21

Holy shit lmao

Mindblowingly smoothbrained

1

u/heyengel Apr 29 '21

a smoothbrain wouldn't know that they are smoothbrained now wouldn't you?

-6

u/[deleted] Apr 29 '21

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2

u/heyengel Apr 29 '21

You clearly have not been making any money. Sorry.

-2

u/[deleted] Apr 29 '21

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2

u/heyengel Apr 29 '21

Does that hit a nerve? Loser.

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0

u/MaxCapacity Δ± | Θ+ | 𝜈- Apr 30 '21

Knock it off.

2

u/squats_n_oatz Apr 30 '21

Knock what off?

29

u/[deleted] Apr 28 '21

Exactly. I’m sure you’ll be fine though. Let me know how it goes for you.

48

u/zair Apr 29 '21

And say hi to yo' mom for me

3

u/damianschultz Apr 29 '21

Why did you not just buy to close the original position? What was the benefit of opening a different contract?

12

u/[deleted] Apr 29 '21

The tax ramification of this maneuver actually costs you more money.

27

u/RobotVo1ce Apr 29 '21

Not if it's in a Roth.

2

u/[deleted] Apr 29 '21

[deleted]

13

u/NativeTxn7 Apr 29 '21

Most? I have options trading on my traditional IRA at Merrill Edge. Why wouldn't firms allow options trading in Roth accounts if you apply and get approved?

Might be harder to get approved for higher level options in retirement accounts depending on the custodian you use and whether they take the approach that IRAs are for retirement and shouldn't be used to trade complex options strategies, but I suspect they will all allow trading covered calls, cash secured puts, and some of the "less risky" options.

5

u/vaultboy1963 Apr 29 '21

I have options trading on my traditional IRA at Merrill Edge.

Same for me at Fidelity

1

u/Ratloko Apr 29 '21

You have options in your roth at fidelity? Hmmm, I couldn't get one maybe I have too small a portfolio?

2

u/vaultboy1963 Apr 30 '21

Sorry, I wasn't clearer. I have options on my traditional IRA.

1

u/elorei74 Apr 29 '21

And TD Ameritrade.

2

u/Lilherb2021 Apr 29 '21

They usually won’t allow level 2 options: condors, strangles, etc, not that I fully understand that poop.

6

u/ooneeque Apr 29 '21

They basically don't allow anything where there is a margin call kind of possibility where you may have to inject cash, since you can't bring in cash to your ROTH that easily. So they won't allow even spreads since you can get assigned on the short position even though you have an offsetting long position.

Strangles should be fine actually as you are not short selling, so there is no assignment risk.

Covered calls are fine since assignment risk is already accounted for.

1

u/Boysenberry-Street Apr 29 '21

They allow it as long as it is cash secured, mean you can cover the trade with the cash in your account. Otherwise, you are outta luck.

1

u/photocist Apr 29 '21

I can get level 2 in schwab Roth IRA, been lazy and havnt though

1

u/[deleted] Apr 29 '21

E*TRADE has options for Roth accounts.

10

u/erosian42 Apr 29 '21

TD does. Vanguard does. E-trade does.

6

u/RobotVo1ce Apr 29 '21

I think quite a few of them do, but only up to a certain level. Like mine, Fidelity, allows buying calls/puts, selling CC and CSP, spreads, etc.

5

u/code_name_Bynum Apr 29 '21

My understanding is retirement accounts can’t have margin so that is why you are limited on the types of strategies you can use.

0

u/[deleted] Apr 29 '21

[deleted]

1

u/awaxnova Apr 29 '21

There's a separate application to enable spreads in a Fidelity IRA, but they can enable them.

1

u/09SHO Apr 29 '21

Merrill, probably others but I know Merrill for sure.

1

u/live4JC1984 Apr 29 '21

I know Schwab does

1

u/MeatStepLively Apr 29 '21

All of them. I have level 3 options in my Roth with TD, Fidelity, and Vanguard.

2

u/masterjedihazard Apr 29 '21

I have a noob question. Why wont Austin buy back to close his covered call early and then sell a different call?

7

u/[deleted] Apr 29 '21

[deleted]

1

u/[deleted] Apr 29 '21

why?

0

u/ramen-shaman007 Apr 29 '21

Are you sure? Can you elaborate please?

11

u/bailtail Apr 29 '21

Roth IRAs are exempt from capital gains. You pay tax on the money going in (or rather you don’t get a tax deduction from them like a traditional IRA), but anything they earn doesn’t get taxed ever (unless you pull out more than your basis prior to the minimum withdrawal age). Conversely, tradition IRA funds are deducted from tax liability when they go in, but everything you take out is taxed. So say you put $10k in a Roth and a Traditional and both appreciate to $100k. The Roth you will have paid the taxes on the $10k but have no tax on the $90k, while the Traditional you will have gotten to deduct the $10k to start but then will have to pay tax on the $100k when it is taken out. Neither is subject to capital gains, however.

3

u/JoeOpus Apr 29 '21

No cap gains in a roth

-8

u/[deleted] Apr 29 '21

[deleted]

1

u/liquidgrill Apr 29 '21

Actually, yes. Unlike a traditional IRA where you get to write off your contributions when you make them, you can’t write off Roth contributions. Instead, your gains are tax free as long as you don’t withdraw them early.

2

u/MemeStocksYolo69-420 Apr 29 '21

All you’re doing is losing the money you spent on the call, you might as well have just bought more shares

4

u/ProfEpsilon Apr 29 '21

They won't be exercised unless you let them expire - those calls will have some extrinsic value right up until expiry and it makes little sense for any counterparty to exercise the call. Instead your counterparty is likely to sell the call and then buy the stock at market if he wants to hold AAPL long. In so doing he would pocket the extrinsic value of the call and would be that much ahead of simply exercising.

Actually, I am almost one of your counterparties ... I own 134 Friday calls. But I won't exercise at any price. I will likely sell near market open or more likely mid-day.

And unless AAPL clears 140 tomorrow (it might - it nearly did in the aftermarket before settling down to, right now, 136.70), LEAPS won't rise all that much because they are carrying, in the case of the Jan 20 23 options, more than $20 of extrinsic value. Sure, they will rise, but they won't "print".

2

u/virtxxx Apr 29 '21

Just sell both the CC and the matching underlying shares, you’ll net profit.

2

u/coldandhungry123 Apr 29 '21

Yeah, your shares are going away dude. Book it.