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Tuesday, November 19, 2024

Top Trades for Thu, 28 Apr 2016 14:06 – AAPL and NRF

 

NRF/Lunar - Nothing at all, we like them but I'd be a touch more conservative:

  • Buy 1,000 NRF for $13.05 ($13,050)
  • Sell 10 2018 $13 calls for $2.20 ($2,200) 
  • Sell 10 2018 $10 puts for $2.20 ($2,200) 

That's net $8.65 ($8,650) on 1,000 shares and you get called away, if all is well, at $13,000 for a $4,350 gain (50%) plus NRF pays 0.40/qtr ($400) but just paid on 3/3 so 6/3, 9, 12,3, 6, 9 and 12 are coming for $2,800, which is another 32% makes this a spectacular dividend play with an 82% total expected return in 20 months - even if the stock flatlines at $13.  Keep in mind though, rates WILL go up and the REITs may be heavily affected so these are not safe plays.  

AAPL/490 - What a mess!  100 calls completely uncovered?  For shame! angry  Well, the $85s are $19.40  and the $105s are $9.70 so I'd spend the money to consolidate at the $85s on all of them and sell the $115s for $6.55 and that should be about net even overall (since the $90s cost just $2.70 to roll) and you can just sell some puts to cover any out of pocket.  THEN, with 100 2018 $85/115 bull call spreads you can sell 20 of the July $95s for $5 ($10,000) and your goal would then to be to collect $5,000 to $10,000 per month selling 20 (1/5th) calls that are 2-3 months out so that, each month, 20 are close to expiring, 20 expire in a month and, as the nearest 20 expire, you sell the next 20.  That way, if any block gets in trouble, you can easily do a 2x roll (the Aug $105s are $2.15, the Oct $110s are $2.15...) without much hassle while you wait for your $300,000 worth of longs to mature.

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