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Technology Stocks : Apple Fanboy Central

AAPL 271.29

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3:59 PM EDT

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From: rnsmth	6/21/2014 10:20:17 PM
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spitsong asked me on another thread: <<rnsmth: What made you decide on the $90 calls rather than the $92.86 (or some other) strike? I'm curious about the criteria you apply when making a decision like that >> The answer was really beyond the scope of that topic, so I am moving it here after a private message back and forth with him. I have often bought slightly ITM or OTM calls when I think Apple is going to do well before the expiration date. I think that is the case today. Criteria 1 - the delta - it is .53 on the $90's and .45 on the 95's. I like the delta. If Apple goes up $10 and the delta stays the same (it won't it, it will get higher) the calls would go up $5.30 - unless my understanding of delta is way off base. Oddball strike prices caused by the stock split - I had some Jan 2015 600's, which became $85.71's. I do not like that. I think there is be less liquidity in these going forward even though the current IO is pretty large (open interest 63,372 contracts) compared with 8,379 for the April 2015 $90's. So, when I rolled them up and out, I selected a strike price of a pre-split $630. Not very sophisticated, I know, but I think I will make some money on them. It is possible that AAPL will dip some in the near-term, but no lower than the mid-80's, IMO. If it gets below $87 or so I will probably add some April $85's.

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