In some of my previous posts I made it sound like the AAPL trade was more contained in this bigger range and that it was relatively more expensive but I learned how much farther it can go than you think. That is, price goes to the path of least resistance.
One thing I am totally sure of is that I can expect to be surprised by these markets, especially when all the negative headlines were coming out about China.
In this segment I'm going to be going over the amount of profit I left "on the table" by not selecting more call options and higher strike prices.
I did not play an aggressive short position through being long put options, but if something were to happen I was ready for the 152.50 puts to pay well if there was some type of earnings disappointment.
I was forced into being bullish (and bearish with put options) in a trade set up that would only make money on a major move whether it be up or down. In other words I could not make money on a neutral reaction to AAPL's earnings
These were some bullish call spread I was setting up
The first green arrow above last Tuesday's chart was a 162.50/170 call spread (last week)
The second one was 165/170 bullish call spread for last week also
The last one I bought before earnings (literally 3:40PM) were the 175/180 call spreads.
If I knew that AAPL should have been trading to 187 I would have loaded the truck with calls with higher strikes and much more of them. But like many things in trading (where there is no resist point above) there is always a chance to learn and improve.
My exits are noted at 175.64 and 176.71 which as you can tell was way too early. The zone of missed profits in yellow spans 12 points!
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