Time to close the synthetic short covered put on our Apple (AAPL) for those of you who took a position in our Optional Trade from our 1/6/23 live trading session.
Ever since we put the trade on, the market reversed, and we’ve been fighting this from day one. We converted it to a back ratio for free by taking the proceeds from selling the puts to buy calls. That is finally paying off.
Whenever you have a trade that has gone against you and you adjust it, it makes sense to take profits when they’re available. That is the best-case scenario. Any pullback in the stock would cause our profits to evaporate very quickly and then we would have a losing position again.
At current prices we can close it for about a $250 profit on five contracts. It has been fluctuating throughout the day. At one point we saw profits of almost $450. That is the main reason we need to close it, is to take some profits now.
Apple is a very good trading vehicle, and we will revisit this type of trade again later but they also have earnings coming up and we want to avoid earnings.
We will be closing the entire trade, do not leave any leg open.
Apple (AAPL): 142.36
TRADE ACTION 1: CLOSE the AAPL 27 Jan 136 call for a net credit of around 7.00
BTC the AAPL 27 Jan 136 call
TRADE ACTION 2: CLOSE the AAPL 24 Feb 128 and the 24 Feb 133 call for a net debit of around 4.20 to 4.25
BTC the AAPL 24 Feb 128 call
STC the AAPL 24 Feb 133 call
TRADE ACTION 3: CLOSE the AAPL 24 Feb 128 put and the 3 Feb 129 put for a net credit of around 0.40 to 0.50
BTC the AAPL 3 Feb 129 put
STC the AAPL 24 Feb 128 put
The Master Portfolio is trading 5 contracts.