Option Investor

January Positions

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Apple Inc.(AAPL) - Every time AAPL dips down near $90 I look at selling the puts at its support level. AAPL has been a decent position over the last few months. While there are other stocks and sectors that appeal to me, I have to keep coming back to this one stock each month. I am a big proponent of finding a hand full of stocks that you know really well. Familiarity with how stock prices react to different market conditions can help you navigate through tough times and adjust the degree of risk you take.

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Because the market hasn't resolved any of the primary issues affecting the levels of asset risks, I still want to be very cautious when adding new positions. We still have a December position on the 110 Calls and the 80 Puts. We are selling the January Puts with a target price of $2.00 per contract. This target requires the AAPL's price to decline somewhat. I will adjust the strike price up if AAPL's price stabilizes. The risk management is at a break and close below the $79.14 low.

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