{"id":18147,"date":"2012-04-02T14:29:00","date_gmt":"2012-04-02T18:29:00","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=18147"},"modified":"2023-04-18T09:35:55","modified_gmt":"2023-04-18T13:35:55","slug":"aapl-cant-go-up-forever","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/aapl-cant-go-up-forever","title":{"rendered":"AAPL Can&#8217;t Go Up Forever&#8230;"},"content":{"rendered":"<p><em>This post is the second in a series that we will be publishing over the next month , tracking the hypothetical performance of broken wing butterfly trades selected by Greg Loehr of Optionsbuzz.com.<br \/>\n<\/em><\/p>\n<p>Apple can&#8217;t go up forever. \u00a0Or can it? \u00a0This week I&#8217;ll be tracking a hypothetical broken wing butterfly on Apple Computer (AAPL) that won&#8217;t lose money if Apple continues its bull run, but let me first recap the SPX butterfly we looked at last week.<\/p>\n<p>The first hypothetical SPX butterfly was designed not to lose if the market didn&#8217;t sell off in spite of the news of slowing growth in China. \u00a0The butterfly in question was the 1360-1355-1345 put fly for a 30-cent credit using the options that expired March 30, and a drop in the market would have been great for this trade. \u00a0But the market really did nothing but chop around and move a little higher over the week. \u00a0So Friday the options all expired worthless and the hypothetical profit for this trade is the 30-cent credit less the entry commissions. \u00a0Remember, the trade didn&#8217;t have to be closed since the options expired worthless and out of the money.<\/p>\n<p>With a risk in this trade of $4.70, and profit of 30 cents, then I calculate the hypothetical profit to be 6.4% in one week. \u00a0Nothing to write home about. \u00a0But making 6% on your money in one week when the market didn&#8217;t do what you wanted?? \u00a0Maybe that IS worth writing home about.<\/p>\n<p>Let&#8217;s look at a similar hypothetical trade this week, but on AAPL. \u00a0Picking the top in AAPL, I think, is not a worthwhile endeavor. \u00a0But if one decided that AAPL might have a pullback coming, then a broken wing butterfly could be a trade worth watching.<\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/03\/AAPL_chart_smb1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-18149\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/03\/AAPL_chart_smb1.jpg\" alt=\"\" width=\"511\" height=\"378\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/03\/AAPL_chart_smb1.jpg 639w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/03\/AAPL_chart_smb1-300x222.jpg 300w\" sizes=\"auto, (max-width: 511px) 100vw, 511px\" \/><\/a><\/p>\n<p>If the stock happens to drop over the next week, it could find support at $580, unless that is, the stock wants to fill that gap. \u00a0That might be TOO much of a good thing. \u00a0So I&#8217;ll just have to keep that in mind while I watch the 585-580-570 put broken wing butterfly using the options that expire next Thursday (remember, markets are closed for Good Friday). Just like a regular butterfly this trade is constructed on a buy 1, sell 2, buy 1 ratio, and the entry price I&#8217;m tracking for this trade is a 5-cent credit.<\/p>\n<div id=\"attachment_18150\" style=\"width: 571px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/03\/AAPL_fly_smb.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-18150\" class=\"size-full wp-image-18150 \" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/03\/AAPL_fly_smb.jpg\" alt=\"\" width=\"561\" height=\"274\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/03\/AAPL_fly_smb.jpg 701w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/03\/AAPL_fly_smb-300x146.jpg 300w\" sizes=\"auto, (max-width: 561px) 100vw, 561px\" \/><\/a><p id=\"caption-attachment-18150\" class=\"wp-caption-text\">Broken wing butterfly risk graph<\/p><\/div>\n<p>So if AAPL does indeed continue this meteoric rise, then no harm comes to the trade. \u00a0But if the stock drops, or even hovers around $600 for a few days, then this fly can start to work out. \u00a0Over the next several days I&#8217;ll be monitoring this trade and analyzing the option chain to determine the best possible exit. \u00a0So stay tuned for any updates, and any other potential trading ideas that might pop up over the next week.<\/p>\n<p>Trade safe!<\/p>\n<p>Greg Loehr<\/p>\n<p>Optionsbuzz.com<\/p>\n<p><em>Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since, also, the trades have not actually been executed; the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commisions. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown. All investments and trades carry risks.<\/em><\/p>\n<p><a href=\"http:\/\/www.cboe.com\/resources\/intro.aspx\" target=\"_blank\" rel=\"noopener\">Risk Disclaimer<\/a><\/p>\n<p>No relevant positions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This post is the second in a series that we will be publishing over the next month , tracking the hypothetical performance of broken wing butterfly trades selected by Greg Loehr of Optionsbuzz.com. Apple can&#8217;t go up forever. \u00a0Or can it? \u00a0This week I&#8217;ll be tracking a hypothetical broken wing butterfly on Apple Computer (AAPL) that won&#8217;t lose money if &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/aapl-cant-go-up-forever\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":904,"featured_media":18150,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1377,1376],"class_list":["post-18147","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-comments-2","tag-l","tag-p"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>AAPL Can&#039;t Go Up Forever... | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/aapl-cant-go-up-forever\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"AAPL Can&#039;t Go Up Forever... | SMB Training\" \/>\n<meta property=\"og:description\" content=\"This post is the second in a series that we will be publishing over the next month , tracking the hypothetical performance of broken wing butterfly trades selected by Greg Loehr of Optionsbuzz.com. Apple can&#8217;t go up forever. \u00a0Or can it? \u00a0This week I&#8217;ll be tracking a hypothetical broken wing butterfly on Apple Computer (AAPL) that won&#8217;t lose money if ... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/aapl-cant-go-up-forever\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2012-04-02T18:29:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-04-18T13:35:55+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/03\/AAPL_fly_smb.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"701\" \/>\n\t<meta property=\"og:image:height\" content=\"342\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Greg Loehr\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Greg Loehr\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.smbtraining.com\/blog\/aapl-cant-go-up-forever#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.smbtraining.com\/blog\/aapl-cant-go-up-forever\"},\"author\":{\"name\":\"Greg Loehr\",\"@id\":\"https:\/\/www.smbtraining.com\/blog\/#\/schema\/person\/eca1238be72d9e66123c20153cbd2158\"},\"headline\":\"AAPL Can&#8217;t Go Up 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Loehr began his career on the floor of the Chicago Mercantile Exchange in Susquehanna\u2019s FX futures and options operation as part of a team supporting five currency option traders, as well as the firm\u2019s traders on the Philadelphia Stock Exchange and the London spot currency trading desk. His professional training came in the form of game theory, quantitative option theory and pricing, and position risk management, and he spent time training with the firm\u2019s founding partners before going on to trade the firm\u2019s capital for the next three years as an equity options market maker on the floor of the Chicago Board Options Exchange. Loehr co-founded Third Millennium Trading, LLC with a Susquehanna colleague after leaving that firm in 1995. He continued to trade on the floor of the CBOE and co-managed the firm's trading desk. He also was responsible for training the firm\u2019s market makers to trade the company\u2019s capital. After nine years as a member of the CBOE, Loehr left the trading floor. In 2004, he discovered his passion for sharing his knowledge with others, teaching options strategy, and has been teaching online courses and weekend seminars ever since. Loehr\u2019s approach to options education breaks down \u201ctheory to tactics\u201d as he details the core skills used by every professional on Wall Street into useable and practical details we can all follow. Loehr has taught thousands of students through webinars and in-person seminars throughout the US and around the globe including Ireland, England, Dubai, Canada and Australia. Loehr earned his J.D. from The John Marshall Law School in Chicago, IL; and he holds the RG146 license from the Australian Securities Investment Commission.\",\"url\":\"https:\/\/www.smbtraining.com\/blog\/author\/gloehrroadrunner-com\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"AAPL Can't Go Up Forever... | SMB Training","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.smbtraining.com\/blog\/aapl-cant-go-up-forever","og_locale":"en_US","og_type":"article","og_title":"AAPL Can't Go Up Forever... | SMB Training","og_description":"This post is the second in a series that we will be publishing over the next month , tracking the hypothetical performance of broken wing butterfly trades selected by Greg Loehr of Optionsbuzz.com. 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Loehr began his career on the floor of the Chicago Mercantile Exchange in Susquehanna\u2019s FX futures and options operation as part of a team supporting five currency option traders, as well as the firm\u2019s traders on the Philadelphia Stock Exchange and the London spot currency trading desk. His professional training came in the form of game theory, quantitative option theory and pricing, and position risk management, and he spent time training with the firm\u2019s founding partners before going on to trade the firm\u2019s capital for the next three years as an equity options market maker on the floor of the Chicago Board Options Exchange. Loehr co-founded Third Millennium Trading, LLC with a Susquehanna colleague after leaving that firm in 1995. He continued to trade on the floor of the CBOE and co-managed the firm's trading desk. He also was responsible for training the firm\u2019s market makers to trade the company\u2019s capital. After nine years as a member of the CBOE, Loehr left the trading floor. In 2004, he discovered his passion for sharing his knowledge with others, teaching options strategy, and has been teaching online courses and weekend seminars ever since. Loehr\u2019s approach to options education breaks down \u201ctheory to tactics\u201d as he details the core skills used by every professional on Wall Street into useable and practical details we can all follow. Loehr has taught thousands of students through webinars and in-person seminars throughout the US and around the globe including Ireland, England, Dubai, Canada and Australia. Loehr earned his J.D. from The John Marshall Law School in Chicago, IL; and he holds the RG146 license from the Australian Securities Investment Commission.","url":"https:\/\/www.smbtraining.com\/blog\/author\/gloehrroadrunner-com"}]}},"_links":{"self":[{"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/posts\/18147","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/users\/904"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/comments?post=18147"}],"version-history":[{"count":1,"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/posts\/18147\/revisions"}],"predecessor-version":[{"id":53687,"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/posts\/18147\/revisions\/53687"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/media\/18150"}],"wp:attachment":[{"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/media?parent=18147"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/categories?post=18147"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.smbtraining.com\/blog\/wp-json\/wp\/v2\/tags?post=18147"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}