PLAY: Sell all of your APKT November 40 Puts (O:APKT 11W40.00) and your APKT November 42.50 Calls (O:APKT 11K42.50) at market, good for the day.
Dear Bottarelli Research Member,
Looking at our APKT 40/42.50 Earnings Strangle, we paid a total of $5.25 for the APKT November 40 Puts (O:APKT 11W40.00) and the APKT November 42.50 Calls (O:APKT 11K42.50). As I write, the puts trade for $4.90 and the calls trade for $1.30, giving you a basket total of $6.20. That’s a nice 18% gain in pocket before APKT reports earnings tomorrow after the close.
With APKT shares dropping so much before this event, something tells me that we should lock in these gains now. After all, we’ve all seen how the market makers drop stocks right down to support only to push them back up on earnings day, and ultimately putting the stock value right back to where we originally entered the position. This “hamster-wheel” effect does nothing for our position except destroy premiums.
On the other hand, APKT can still fall below support on poor earnings and we’d miss out on a bigger gain. But in this case, the greed of holding for this big win is overshadowed by my conservative intuition to lock in our current gains now. Therefore, let’s ring the register and take the money off the table before the earnings event. That way, we have another winner in hand and we can focus on BWLD, AXP, and SNDK going forward. Here’s the play…
PLAY: Sell all of your APKT November 40 Puts (O:APKT 11W40.00) and your APKT November 42.50 Calls (O:APKT 11K42.50) at market, good for the day.
And as always…
Lock and load!
Sincerely,
