Apple Inc (AAPL)

[PaperProfit1]

Another trading strategy...

How about talking a little AAPL?

Since this is an AAPL stock board, perhaps it is OK to talk about that.

I am feeling intermediate term bullish but short-term bearish. I think that it is quite likely that AAPL will close below 20 on Aug. Expiration, but very likely hit 25+ before Jan 05.

One strategy is to finance your long-term leap calls (Jan 05 calls $25 strike), by selling short-term calls, until there is an indicationt that the stock will continue to rally.

Here is a mock trade with a risk graph. Some web sites allow you to see these risk graphs, which are simply a plot of price vs. profit. The color curves shows me how my profit will progress as expiration approaches, and depending on the move of the stock price. My profit at expiration is represente by the black lines. Once Aug. Expiration goes by, my risk will change to reflec the risk for the long call.