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OK Options boys

By: Java



I like selling puts.  I am way over extended at the moment and am tending to let things lie, expire, and in many cases have to throw things forward by buying out the put, then selling it to the future for the same amount and hoping time allows that stock to recover.  I have 14 expiring in the next 90 days and had to throw 13 forward to 2020 or beyond.  Way more than I wanted. Thanks IBM. GE, etc.

But this caught my eye.  Apple.  Has fallen from $230 to $168.  PE of 14.   Forward PE of about 12.  

 

Here's my temptation.   July 2019 puts at $140 for $4.70.  Yep, Apple would have to fall ANOTHER 18% to get there.  At present earning, it would be a PE of 11.4  That's insane for a company like that.  Apple is switching over to services and gaining far more from I tunes, apps, etc.  Soon to be Apple TV and less hardware.  Soon a lot in credi card fees with Apple Pay.

 

Sooooooo.  What if I sold say, puts for 2,000 shares?  Maybe even 3,000?  That would net me $14,000.  And what are the odds of Apple falling that far in the next 6 months?  I know I am exended and this is gamlbing but this looks like a good gamble to me.  A stock I'd love to buy at this price, and get paid $14,000 in either case.  The negative would be it would obligate me to come up with $420,000 if it sinks that far.  I just don't see that happening and think I will be pocketing $14,000 free.  Thoughts?

 

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