June 30th, 2008. Posted by AppleOption
June 30th, 2008. Posted by AppleOption
June 29th, 2008. Posted by AppleOption
Week 26 of 2008 trading was a major sell off prompted by Goldman Sachs down grading everything as they transition out of the oil bubble. Examine the following year-to-date performance.
Now, compare that performance to the AppleOption Portfolios!
AppleOption Short-Term Portfolio (STP)
Started the January 2008 with $10,000
Current portfolio value $13,380.20 (after commission/fees)
Year-to-Date Gain 33.8%
AppleOption Long-Term Portfolio (LTP)
Started the January 2008 with $25,000
Current portfolio value $24,427.65 (after commission/fees)
Year-to-Date Loss 2.3%
AppleOption Auto-Trade Portfolio (ATP)
Started the June 2008 with $10,000
Average Percentage Gain per Trade: 20.5%
Performance since Inception: 100% Winning Trades
Number of Open Trades: 2
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Weekly Review of Portfolio Trades
AppleOption Short-Term Portfolio
Again, another difficult week of trading Apple. This type of week causes the average trader loses all their gains, typically in the panic as Apple fell from $179 to $164 in two days! During this slide it is very easy to lose focus on the long-term plan with Apple and place compromising trades. AppleOption’s mission is to help educate our members about options trading and illustrate how we maneuver the market in real-time. This is an invaluable resource, as money management is the key to long term success in options.
The week started with $13,745.77 and finished at $13,380.20 a loss of 2.7% despite the $15 plummet in stock price! The busy week was started by selling in-the-money calls and then subsequently taking profit on them. On a rally, the STP again sold at-the-money calls as well as purchased put protection. The following day continued to rally to $179 so we were forced to roll our put protection and added to them. At the top we again sold at-the-money calls. Thursday during the sell off, the STP created two vertical put spreads (one $10 and the other $15 window) by selling puts during the fall. This is a perfect example of money management. The STP sold against previously bought puts for nearly the same price they were purchased. This trade removes initial capital from the market, while leave a strong hedged position if the fall continues. Friday was a similar sell-off that the STP used to step-wise enter a put butterfly. In the end, the STP walked away from a dangerous week relatively unharmed.
AppleOption Long-Term Portfolio
The LTP had two trades this week, both gear to protecting capital. Wednesday during the rally we sold calls which were helpful in the sell-off. Then on Friday, the LTP purchased put protection with the goal of a put butteryfly but missed the fill. While the portfolio balance is at loss of 2.3% for the year, this is solely due to depreciation of LEAPS during a major $15 sell-off. We have a fantastic position for the long-term and should start to see benefit in the next few weeks.
AppleOption Auto Trade Portfolio
The ATP had two trades this week. Wednesday’s technical analysis created an entry point prior to the close. Unfortunately, RIMM earnings, multiple stock downgrades by Goldman Sachs and reactions to FOMC produced the sell-off on Thursday/Friday. Trading rules have a 3% of total portfolio equity stop loss, which was never reached so the ATP added to our position. For momentum trades, AppleOption does not favor the idea of “doubling down.” The portfolio always looks to step-wise enter into a good position. The ATP buys 1/2 a position, if Apple rallies we take our gains. However, if Apple falls initially though maintains above the stop loss limit and the technicals look good, the ATP will purchase a second 1/2 position. At this point a full position is established and will only be closed for gain or at the stop loss. This is the case with the currently open position. Given the strong Apple close, we should see continuation rally on Monday, so trade was left open.
There is a lot of excitement about our newest portfolio. The AppleOption Auto Trade Portfolio (ATP) is offered through ThinkorSwim. Investors interested in following the AppleOption Auto Trade Portfolio will need to open a ThinkorSwim brokerage account as well as need an active AppleOption Membership. After both of these are set-up, then investors will be ready to activate the auto-trading service through ThinkorSwim. Each trader determines his/her individual risk tolerance by selecting a specific allocation type. For more information please refer to the AppleOption Auto-Trade Portfolio (ATP) page.
Key Reference Points:
1st Resistance: $178.50 - triple
2nd Resistance: $182.30 - triple
1st Support: $161 - double
2nd Support: $148 - double
As mentioned last week, investors looking to “time” an entry into Apple stock, were provided an excellent opportunity this week. The stock fell as low as $164.24 which is only a dollar above the 200-day moving average. Traders interested in Apple have a historically rewarded for entry points at these levels. However, this will likely only last until July 3rd as after that the market will enter the earnings cycle.
Up-Coming Earning Reports:
Apple will announce Quarter 3 earnings on July 24 (after July option expiration).
Morgan Stanley: Raised its price target to $210 from $185, but stated in a bullish market shares would be trading at $278.
- Wednesday June 18th
Citigroup: Increased its price target from $248 to $287 and has a “buy” rating.
Lehman Brothers: Raised its price target from $202 to $234 and kept its “overweight” rating.
- Tuesday June 10th
Fairly quiet week.
The maker of the Tesla Roadster is in the development process of a sports sedan code named WhiteStar. The electric car company is eager to bring this 4-door, 5-passenger vehicle to the market. Tesla Motors is allegedly planning an IPO to raise $100-250 million.
June 28th, 2008. Posted by AppleOption
Tesla Motors is the electric vehicle powerhouse company. They created the Tesla Roadster capable of the following:
0 to 60 mph in 3.9 seconds
256 mpg equivlent, 100% electric
Less than 2 cents per mile
The company allegedly is interested in raising $100-250 Million more capital. Previously they raised $40 million in the third round of venture capital after receiving support from Google co-founders Larry Page and Sergey Brin as well as many others. It is believed that this next round may indeed be in the form of an IPO (initial public offering). According to VentureWire, Tesla is seeking $100-250 Million to refuel. Siry would not confirm or deny this prospect and comments that the company “can not” officially comment on financial plans. In the past they have been very vocal about financial planning. Perhaps Tesla Motors is in the beginning stages of preparing an IPO rollout!
The company not only produces high end electric vehicles, they have “almost finalized” the design of the Tesla Motors WhiteStar. The sport sedan code named WhiteStar is allegedly a 4-door, 5-passenger vehicle comparable to mid-level BMW/Mercedes with a $50-70K price range. By the end of the second quarter of 2008, Tesla is expected to share a glimpse of the design or prototypes. Wired reports that the company might also offer the WhiteStar with a hybrid drivetrain (gas + electric). Either way, Tesla already has their manufacturing plant in New Mexico preparing to mass produce the new sports sedan.
The basic mater plan for Tesla Motors.
1) Build sports car (aka Roadster)
2) Use that money to build an affordable car (aka WhiteStar)
3) Use that money to build an even more affordable car
4) While doing above, also provide zero emission electric power generation options
This is definitely a company to keep an eye on!!! Anyone with more information about the IPO release, please comment on this posting to share with AppleOption members.