Apple Stock trades using the Biweekly Put Selling Strategy are up 27% since January. There are three factors that are the key elements to providing continual profits for my Apple Stock trades this year.
- The first is using the technical indicators to pinpoint support levels and the periods when the trades should be entered or not done.
- The second is staying with trading the weekly options which keeps the trades short-term.
- The third is using a schedule to force profit taking as the stock climbs.
The trade I did on July 8 however shows that there is no foolproof way to earn profits. Trading within stocks always has a level of risk no matter how strong the strategy and rules being used are. With another trade done on July 11 I am risking $62,840 of capital but could in effect be assigned up to $720,000 in Apple Stock.
Here is a full analysis of the past two trades, how to handle when scheduling profits fails and how to establish comfort levels when trading well beyond the amount of capital available to actually pay for assignment in a trade.
While many investors feel that spreads limit their losses, nothing can be further from the truth. A spread will assist in controlling losses but depending on how the spread is structure losses can add up quickly or assignment of shares can happen overnight when an investor least expects it. Often with spreads investors oversell positions and end up stunned when a trade fails and losses mount and shares are suddenly assigned. Like every trade, a spread can only assist to a specific degree.
By understanding my comfort level in every trade I am better able to manage a trade as there is limited pressure on having to move too quickly on a trade. Trading within a stock I would own if necessary makes adjusting the position much simpler and definitely less emotional. Holding too many contracts can increase emotions when a trade turns the wrong way and losses begin to mount. Understanding your comfort level allows you to make a quick, emotionless decision which limits losses to a minimum.
Apple Stock Biweekly Put Selling Strategy Discussion
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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.