AppleOption is issuing a trade alert for the Short Term Portfolio.

We initiated a STP trade last friday and now only 5 trading days later, we will close part of the trade for 32.5% Gain.

Now that gain might sound impressive, however we only sold a portion of the position. We bought a total of 18 contracts for $0.533 each (total cost basis $959.40). This morning we sold 12 contracts for $1.06 each (total $1,272). The total gain is $312.60 or 32.5%, but the trade is not over!

AppleOption STP owns 6 remaining contracts with a completely FREE cost basis. We’ve already locked in a 32.5% gain and now potential will do better. If we sold all the contracts this morning then total gain would have been 98.8%.

UPDATE: Our standing order to sell at $1.70 executed 3 more contracts for a total profit of $510 or a gain of 218% (since we bought at $0.533). We still have 3 more contracts open… and the next standing order is $2.25 for 2 contracts.

UPDATE 2: Our standing order to sell at $2.25 executed 2 more contracts for a total profit of $450 or a gain of 322% (since we bought at $0.533). The portfolio only has 1 contract open… we will hold out on this one for Apple to hit $140 or more such that the contract will be worth $5 or more.

Trade Summary To-Date: 17 of 18 contracts sold for a total of ($1,272 + $510 + $450) $2,232 with an inital cost basis of $959.40. The net profit is $1,272.6 or 132.6% Gain Realize that there is still one contract left to sell until this trade is closed.

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Today Apple Stock (AAPL), opened at $118.24 and climbed to a close of $122.96. Not a bad day gaining 3.20%. But the real story occurred in after-hours trading, where the price climbed an additional 3.53% to $127.30!

The motivation to this surge was the iPhone SDK. Apple sent notification of an event occurring on Thursday, March 6th @ 10:00am PST. At this event they plan to detail the iPhone software roadmap as well as release the iPhone software development kit (SDK).

Utilizing the iPhone SDK, Apple might be able to help businesses customize the iPhone for better integration into the corporate environment. In addition to the business world, Apple has seemingly assisted Abilene Christian University (ACU) develop software to enable incoming freshman (whom are given an iPhone) receive homework alerts, answer in-class surveys and quizzes, get directions to professors’ offices and check account/meal balances with 15 helpful web applications. Once the iPhone SDK becomes available, businesses will be able to similarly customize the interface to maximize productivity within the company.

The stock market views this news as potential catalyst to increase sales. Last quarter, Apple has shipped 2.3 million iPhones. If the iPhone becomes accepted into the corporate model, then the blackberry might quickly find itself being replaced by the iPhone. Meanwhile, Apple will profit from increasing product line sales growth. Investors in after-hour trading got an early jump on the news and help catapult Apple up to $127.30.

Click to enlarge Apple’s 60-day Chart

Traders might also gain helpful insight by listening to Tim Cook’s talk at Goldman Sachs Technology Investment Symposium.

In the long-term, Apple seems to be forming a nice bottom before the next rally. While at least this news will help bring the stock price back to $130’s or better.

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AppleOption is issuing an Index Condor Portfolio trade alert!

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AppleOption would like to share a free bonus trade.

If you haven’t already heard, Google was punished today and dropped to an intraday low of $446.85. The plummet was due to “old” news from comScore reporting that clicks were down month to month and flat year to year. This is old news as it is exactly what was shared previously by Google in their 10K report and during their recent earnings call. The previous news dropped Google from $550 to $500. We now saw another $50 drop, to a new 52wk low.

Click to enlarge the 10-day Chart

Back in November, Google broke $700 and there was all sorts of speculation that it would soon see $1000. There was a massive amount of premium on the LEAPS. Mid-December the 2010 $1,100 Call was trading for $50+, and more recently when Google was trading in the $550’s the contract was selling for ~$7.

Click to enlarge the 2010 $1100 Call Chart

Last item on the above chart to notice is today’s value of that same option.
The option chain below has a closing option mark value $4.40 (bid $4, ask $4.80), while Google closed at $464.19.

The Bonus Trade:
BUY TO OPEN: Jan 2010 $1,100 Call (YVDAP) - 2 Contracts for $4.50 or less

Once that order is filled, then

SELL TO CLOSE: Jan 2010 $1,100 Call (YVDAP) - 1 Contract for $19.00

In order for this closing trade to fill, Google must return to the $550-600 range. At this point the trade would net +100% return. The remaining contract is “free” and one would hold until Google $700+ is achieved. At which point you could easily sell for $50+ and net a nice +1000%. This trade obviously assumes that Google will return to it’s previous levels.

Googles PEG is currently an astoundingly low 0.67. Long-term fundamentals favor Google at these prices. The patient investor will be handsomely rewarded if they notice the value despite the short-term trader panic!

Total risk of the trade: $4.50 * 100 shares * 2 contracts = $900
Targeted long term return: $19 * 100 shares * 1 contract = $1900+
The remaining contract is then your leverage for additional profit.

Disclaimer: Please read our legal page, as we recommend you consult your financial advisor prior to acting on the above information.