Gambler in Me

Some ladies like to spend their thousands on a designer bag, but I like to buy investments that will give me returns that I seek forth.

Calculated risks are always gamble.  Weighing in my options, I decided to buy a LEAP out to Jan/2017 call on $AAPL with a strike price of $110. 

PC‏@PC_Trades

BOUGHT 1 AAPL Jan20'17 $110 CALL @ 29.54 - call me crazy lol

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12:55 PM - 21 May 2015

The reason behind my trade is I'm bullish on $APPL and I think in the next while it might head upwards.  Therefore, I can bank on the gains.

Currently, Apple Inc ($AAPL) is trading around $130/share.  I could buy 100 shares @ $130 for a $13,000 investment in today's market.  But I don't have $13K USD laying around unless my GTC order for $GOOGL hit $600 soon.  Instead of owning the stock for $13k, I put down $3K to play on the price movements.  

Yesterday, $AAPL went up by $1.15/share and my option also went up by like $0.80/share.  If I were to sell my option at any point yesterday, I could have made $80 on $3,000 vs owning the stock for $115 on $13,000.

The downside to this CALL option is if $AAPL share prices continues to fall from this range, I would lose money depending on when I want to cut my losses in the 606 days left to my expiry date.  Let's say by Jan 2017, $AAPL is trading below $110, my CALL option would become worthless and I would take a $3k realized loss vs owning the stock with a paper loss of $2k.  

Time will only tell whether I made the right call or not.