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Ring Register On APPLE Option After 5 Days Trading



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Jan 17 2007
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I gave up. Nope, I didn’t mean investing stocks or option trading. I meant the excitement and the volatility of Apple Inc (Nasdaq : AAPL, stock) stock since its’ launching of iPhone. Remember when I mentioned I invested 5 contracts of April 2007 85.0 Call Option in my previous blog iPhone Definitely Make Me Money? Well, I have closed my position yesterday leveraging the benefits of the uptrend of Apple a day before the earning announcement scheduled today (after the bell).

Looking at the chart, I can hear people (including myself) screaming “You should have sell it the next day … it reached $97 plus … you shouldn’t be greedy … etc“. There’re some reasons why I hold to my position (Nobody including me know how high can this guy goes). First, the uptrend looked sustainable as it went above the highest price of the first 45 minutes trading with good volume. Second, the earning season started and traditionally Apple demonstrates sustainable uptrend days before the actual earning right up to the last minute.

As you can see in the chart, it consolidated twice, challenged my emotional of greed & fear. First being Cisco (Nasdaq : CSCO, stock) announced law-suit against Apple on the iPhone trademark. Was I worried about this? Nope, because I think it’s a small issue – worst case scenario will probably see Apple rename it to Apple Phone or something like that. People will buy not just because of the name but because of Apple and the cool-looking user interface (I love it).

Then came the second bomb-shell when the Government authority started investigating the back-dated options of which Apple’s board gave Jobs 7.5 million stock options in 2001 without the approval of the company’s board. Was I worried about this news? Nope, because this case was highlighted earlier and Steve did not benefits from it and and independent investigators “found no misconduct by any member of Apple’s current management team.”

Furthermore, other well-known tech firms including Broadcom Corporation (Nasdaq: BRCM, stock), Novell Inc (Nasdaq: NOVL, stock), McAfee Inc (NYSE: MFE, stock) and CNET Networks Inc (Nasdaq: CNET, stock), have been caught up in options backdating woes as well as non-tech companies such as insurer UnitedHealth Group Inc (NYSE: UNH, stock). In fact it was said that options backdating is a widespread and commonplace problem in the Fortune 500 affecting as many as 30% of the companies. So most of the analysts do not think SEC will target only Steve Jobs.

Although I’m pretty sure Apple will definitely beat the estimated earning, I’m not sure if Apple will announce some not so-sexy figures such as profit-margin, forward earning etc which might send the stock price down post-announcement today. So I decided to ring the register, just like what Jim Cramer always says “Bull & Bear makes money, Pig get slaughtered”.

# TIP: Takes profit whenever you have one, you can never buy the lowest and sell the highest – just like what happened to me. Stock market always test your emotion. Trust your feeling and research.

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