*****UPDATE***** 5/30 10:49AM

THIS TRADE WAS VERY FORGIVING AS EXPECTED, BUT THE AAPL CHOPFEST CAUSED ME CONCERN THIS MORNING. THIS TRADE NEVER QUITE MATERIALIZED AND APPROPRIATELY EXITED THE TRADE WITH A VERY SMALL GAIN. IF AAPL HAD CONTINUED TO MOVE AGAINST THE POSITION THETA BURN WAS GOING TO KICK IN THIS CLOSE TO EXPIRY.CAPITAL PRESERVATION IS KEY, MOVING ON AND MORE EXPLANATION LATER.

GAIN .05 OR 5$ PER SPREAD OF 25$ NO LOSSES THOUGH.

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*****UPDATE***** 5/24 9:00PM

AS EXPECTED TODAY, LIKE CLOCKWORK, THE SECOND I LET LOOSE THE TRADE IN THE BLOGOSPHERE, I WAS INUNDATED WITH AAPL 600 NEXT WEEK AND OTHER BULLISH COMMENTS FROM ALL THE AAPL PERMA BULLS. WHETHER THEY WERE VIA STOCKTWITS, TWITTER, OR PERSONAL TEXT MESSAGES, I STILL STAND STRONG IN MY TRADE. YES AAPL IS GOING TO GO UP AND SO FORTH BUT BELIEVE THE MARKET ITSELF IS SET RIGHT TO HOLD AAPL IN A RANGE THROUGH NEXT WEEK.

THE REASON I CHOSE A BUTTERFLY ON AAPL, WAS BECAUSE THEY ARE VERY FORGIVING ON HIGHLY VOLATILE STOCKS LIKE AAPL. I SAY THIS  BECAUSE OF THEIR HIGH IMPLIED VOLATILITY VALUES, WHICH KEEP OPTIONS EXPENSIVE UNTIL CLOSE TO THE CYCLE END.

AS OF TONIGHT’S CLOSE, EVEN THE SAME MAY25 BUTTERFLY SPREAD IS GIVING 2.29 CREDIT, AND THAT’S ALMOST 80% GAIN OVER OUR JUNE1 SAME SPREAD. THAT WAS JUST A FORWARD LOOKING EXAMPLE IF AAPL IS STILL MEANDERING AROUND THIS AREA BY NEXT THURSDAY, AND COULD EASILY SELL FOR A HANDSOME PROFIT.

I DIDN’T THROW THE KITCHEN SINK AT THIS TRADE EITHER, IT WAS MERELY AN 8% OF MY ACCOUNT TRADE. I HAVE MULTIPLE PROFITABLE AVENUES OUT OF THIS TRADE, AND WILL KEEP YOU ALL POSTED.

*FYI*

A PAYOUT CHART WILL NOT BE POSTED TONIGHT AS STATED EARLIER.  THIS TRADE WILL MOST LIKELY BE EXITED FOR PROFIT BEFORE EXPIRY, AND MAY POST A PAYOUT CHART LATER, BUT HAVE BEEN BUSY HELPING WATCH MY OLDEST NEPHEW TONIGHT WITH THE WIFE.

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$AAPL HAS HAD A NICE RUN AS OF LATE, BUT FEEL IT WILL PULL BACK SOME NEXT WEEK. THIS IS A LIMITED CAPITAL TRADE OF $130 PER CONTRACT SPREAD @1.30 DEBIT.

THIS TRADE WILL REACH 769% GAIN IF $AAPL FINISHES AROUND $555 NEXT WEEK.

MAX LOSS  OF INITIAL DEBIT 1.30 WILL BE IF $AAPL FINISHES BELOW $545 OR ABOVE $565 NEXT FRIDAY

BREAK EVEN ON LOWER LEG WILL BE 546.30

BREAKEVEN ON UPPER LEG WILL BE 563.70

PAYOUT TABLE TO POSTED LATER TONIGHT.

HERE ARE MY TRADE DETAILS.

Your Order Has Been Submitted
Order Details
You have entered a butterfly.
Leg Action Contracts Option Description Price Duration
Leg 1 Buy to Open 5 AAPL Put AAPL Jun 01 2012 545.00 Put Debit 1.30 Day Order
Leg 2 Sell to Open 10 AAPL Put AAPL Jun 01 2012 555.00 Put Debit 1.30 Day Order
Leg 3 Buy to Open 5 AAPL Put AAPL Jun 01 2012 565.00 Put Debit 1.30 Day Order
Quote AAPL   566.81   -3.75 Bid 566.70 Ask 566.82 Volume 11,774,002
AAPL JUN 01 2012 545.00 PUT
AAPL JUN 01 2012 555.00 PUT
AAPL JUN 01 2012 565.00 PUT
Bid 3.00 5.40 9.20
Ask 3.15 5.65 9.65
Last 2.80 4.80 9.40
Change N/A [N/A] N/A [N/A] N/A [N/A]
Volume 802 1,047 702
Delta -0.18 -0.31 -0.46
Open Int 0 0 0
Desc AAPL Jun 01 2012 545.00 Put AAPL Jun 01 2012 555.00 Put AAPL Jun 01 2012 565.00 Put
Net Quote
Bid
0.90debit
Mid
1.45debit
Ask (natural)
2.00debit
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