Thursday, October 20, 2011

How I Traded Apple Over Q3 Earnings: $AAPL

Strategy:
Minimize downside risk, protect existing profits
Keep some on the table to not miss out on potential gap up
Sell remaining shares at market open regardless of gap up or down.

Theory
Given high expectations on EPS, if apple fails to meet these expectations or sandbags their forward guidance, stock could fall 5-6% or to $395-400

If EPS targets are greatly exceeded as expected stock could gap up in the morning 5-8%

What I Did
Sold 2/3rds before earnings. Next morning at the bell I sold the remaining 1/3.



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