Last week, I mentioned a few times in articles and social media that it would not be a bad idea to take some Apple off the table if you owned the stock or calls, or perhaps just buy some very cheap put protection. At all-time highs, it didn’t really seem that whatever news comes out next week is going to goose the stock – hence, what is likely known is probably priced in already.
In fact, that has been the pattern with Apple leading up to new product releases. So, for those who missed out last time around at selling some Apple at the $700 price area (all-time high before the split), this was your chance. But if you had cement in your shoes, it was going to be hard to move. Yet, nobody was advocating this move.
Jim Cramer made some excellent points the other evening about just owning the stock – don’t trade it. Perfectly true, yet as we saw on Wednesday with a rise in Apple volatility the markets are looking for big moves coming. Makes sense too, right? An event like next week will have its doubters and likely some will be disappointed by ‘this or that’, causing some sellers to come out in the short term.
My thought was not to dump Apple, rather to be smart and lessen the volatility that was coming by adding some protective puts, selling part of your stake if you had nice gains or selling upside calls against your stock. There is absolutely nothing wrong with the company —but the stock may be rich here. One analyst thought so yesterday, and among other news caused a big 4% drop in the stock, biggest in months.
