Thursday, January 24, 2013

The BULL is Alive

The Swing Position is Open ,

The Wall Street Journal ran a story that independent research firms report orders for AAPL iPhone screens from its various Asian suppliers had dropped over 50%. This caused a steep dive in APPL stock and cleared out stop orders under $500, which was a critical price level that had held since mid-November

Apple closed at $500.00 per share on Friday, January 18th, 2013. This was options expiration. If you think this was a random coincidence, please crawl back in your hole and continue drinking the cool-aid. You are beyond help and will continue to lose your hard earned money.

You need to understand how the institutions maximize profit on these options they sell. They charge a premium for each options sold. Whether a call or a put, they all have a strike price they are sold at. The strike is the value the buyer is betting the price will be above for a call and below for a put. In the case of Apple Inc. should a call be bought with a strike price of $500.00, the buyer would only make money if the call closes above $500.00. The more above $500.00, the more profitable the option becomes on options expiration day. The same thing occurs with puts. If puts are bought with a strike of $500.00, the buyer makes money the lower it goes below that key $500.00 level. Lastly. an option will expire 100% worthless if it closes at the strike price. If this happens, the institutions maximize profit by taking the entire premium. Each options expiration, this means millions of Dollars to institutions as pure profit.

The scam concludes when institutions analyze and isolate where a stock MUST close to maximize profit. They push a stock to that level using their billions of Dollars and rape the average investor who plays the options in hopes of hitting a home run.

Short Sellers cashing in on the death of AAPL will NOT stop this rally.

 The smooth transition of power and the inauguration of President Obama should provide additional short term support to the current market. Market stats are also favorable this year based on several measures including relative performance under democratic presidents and the January effect or calendar ranges. On a pure price basis we are getting a bit extended in the SPY.

Long @ 1456.50 Initiated with 10 contracts with a current total profit Gain of + 136.25 pts
How do you like that Boston ! ?

Jaguar Trader

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