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Historical Posts

Historical Posts for Weeklies

 

11/08/12 - Leaving the ranges be. I never saw tax selling coming. Looking back, I saw tax selling coming. (The graph and range are not aligned. Didn’t see event coming)

11/07/12 (pm) -  AAPL is being sold off for tax purposes. As it currently stands, taxes will significantly rise January 1st 2013. Even at $560, AAPL is still up 38.3% YTD. Funds are locking in their gains at current rates. You also have a little source of funds selling in AAPL as funds needed to raise cash to meet their commodity margin. — Realize why AAPL is selling off. It is not selling off for a 100% true fundamental reason. The stock is reacting to what has to happen, not what the future holds or intrinsic value reasons. The stock will have to re-value itself. Think of this tax selling just like the Nasdaq 100 rebalance of 2011. The stock had to drop due to forced selling. AAPL could have announced they won a $200B lawsuit and the stock would still have dropped. Just the way stock mechanics work. This will be no different. Any type of selling begets all types of selling. Over time, the stock will re-value itself to reflect its current balance sheet.

11/06/12 pre-open - Due to possible election volatility, switched back the 98% call side to $630.  This was sunday nights range.

10/29/12 - You’re not going to want to play weeklies with any credit spreads this week. The markets won’t be open until Wednesday and 3 days does not carry enough time premium.

10/21/12 –  Probabilities not tracked during events. — It is always a good thing when the highest OI strike is a put. Aaplpain doesn’t use price targets for bottoms but dates. Last week was an Ex-LEAP that expired bringing in tons of selling pressure. Aaplpain believes you will see the stock bottom on 1 of 2 dates. We will see AAPL bottom on Monday or Friday. I would lean towards tomorrow. The reason you may see a little more selling is based on the simple fact, selling begets more selling. OpEx started it, and fear will finish it.

10/18/12 (pm) Some folks say; “A picture says a thousand words.” — I’d say; an Apple option chain only needs one, “ouch.”

This is the same graph as the monthly, only expanded. I put this on the weekly tab as it wasn’t being used.

10/09/12 - Refer to 10/05/12 — Paragraph Two. — Good thing is you are running down the call strike. It will overshoot eventually (weeks) AAPL will then rocket higher. See <Misc Tab<Frames.

10/08/12 (pm) I still think $600 will hold and the highest put OI will come up, but had to change it tonight now that we have a day trading with this being the front week. For future reference, when the OI strikes are spread this wide, it is telling you AAPL will be volatile. (Which we can see) Wider they get the more volatile, closer they are the more stable AAPL will be.  

10/07/12 - I’d wait for tomorrow to get a better OI picture.  

10/05/12 (pm) Real quick note: Don’t be fooled with the negative spins on Apple, inc lately. They come out every qtr, seemingly, around earnings. It’s perfectly normal for Apple, inc to be the only company effected by a Hon Hai problem and MSFT, AMZN, SONY, etc to actually benefit from not having workers.

I want you to be aware of another secret the so-called pros are oblivious to. Something I call Ex-LEAP Expiry effect. Apple is on a JAJO option cycle. This means October used to be a LEAP. Depending on the open interest skew, Apple can have a hard time moving up on an Ex-LEAP expiry. It has to do with the pressure call options bring. The main take away is; do not be fooled by this artificial weakness. It is a scenario for add-on the dip; not clip everything and walk away. Maybe tomorrow I will add more…Example; Oct 20 Expiry has almost 1mm OI contracts vs Dec that has 150K.

09/26/12 (pm) I didn’t catch the 80% $660 put shift. I still think all those ITM puts will push AAPL off the $660 strike.

09/23/12 - See how AAPL trades tomorrow with sales figures released and go from there. Get a more clear OI picture after that data.

09/13/12 (pm) Aaplpain has reasons and methods behind what ranges are chosen at times or during events. This site isn’t on auto-pilot. There was tons of pumped up IV credit to take in this week on the outer strikes. I’m leaving the range sit still [mainly speaking put side] for tomorrow as they should have been used earlier in the week if you chose to play. This site is about high probability, not high risk profit. Last week was the 1st time in 7 weeks that the highest call OI was breached. It was only by $0.44 but was breached nonetheless. When this happens, it is rarely a one week event. A rally small or large has typically ensued. Watching AAPL up against the $680 strike will give us additional confirmation. If the stock sells off, we know why and not a big deal. If the stock runs over the $680′s like they are standing still, then last week’s breach once again gave us a heads up. [Last week you would have wanted to see a bigger beat than $0.44, which really isn't anything on a $680 stock to truly get excited for an upside run. But hey, $0.44 is better than nothing]

09/10/12 - And you see why probabilities are lowered/not tracked during events. Now that we have a day down with the weekly trading by itself, I put down some ranges I think would be in place if probabilities were tracked.

09/09/12 - Event this week so probabilities are lowered. With that said, IV becomes elevated so there are some good risk/reward trades.

09/03/12 - If the iPhone event is on the 12th, expect an invitation on Wednesday. This would be one of the weeks you would skip playing the weekly with Cr spreads. Weeklies have such rapid decay, everyday counts. Being this is a short week on top of a possible event, there are definitely better weeks to play Cr spreads. As far as selling covered calls, cash puts or simply using as buy/sell points would be more acceptable as I do not consider those risk trades. During events realized volatility can rise lowering probabilities. I think the 98% range holds but be mindful of the aforementioned elevated risk.

08/30/12 (pm) I should not have moved the 80% range up last night as the $650 strike was only 200C difference. I caught that on the SPY, but not for AAPL. As far as reality or trading, not a big deal as you turn around and sell a $660 call against if happens to expire ITM. —8/31 AM - Forgot to add, if you used the $680+ strike all week, I would just leave it.

08/27/12 (pm) Brought down the 98% call side. The $730/$735 call spread was selling for ~$0.13 (negotiated) at its peak.  I like closer to $720 but $715 should be fine.

08/26/12 - I’m sure the 98% range is fine but would want to see the open first.  

08/23/12 (pm) If you used the $680 strike, I would just leave it as a job well done. I have the 80% range on the $675 strike as there is only a 700C difference from the $670. If you like to use the highest OI at all times, you know where it is. Added note on the monthly too.

08/22/12 (pm) Aapl_pain is curated. If you used $680 as the highest OI, I would continue the course.

08/20/12 (pm) We now have a better outlook – of where AAPL won’t be. 

08/19/12 - I would want to see the open before I put to work the 98% range. As far as the 80% goes, it’s best to get another day of OI build up.

08/09/12 (pm) All the Dividend arb activity was on the 100 delta strikes. (or close to)  This was primarily the Monthlies and beyond with Jan’13 leading the activity. Example; the $300 calls had 126K volume today but are only left with 2.9K OI for tomorrow. Feel free to keep using the $635 strike if used earlier in the week. I brought the call side to the highest OI and using the $605 incase becomes highest tomorrow. See the monthly to get an example of how the 95+ deltas got exercised. (visual example of what the Sep-Jan’14 DITM call OI looks like)

08/07/12 (pm) You’re going to see a ton of activity on the ATM options tomorrow. That’s the reason I have over-ruled the highest OI this week.  ITM calls will collapse and go poof. (As far as OI goes)

08/06/12 (pm) I have the 80% range on strikes that are high, but not the highest. If they never turn into the highest OI, it would not have a negative effect. As far as selling calls/spreads this week, you’re going to see a reduced premium due to the dividend.

08/02/12 (pm) Since there is only a 900 contract difference between $610 and $620, I’d just keep using the $620 strike.  NFP is tomorrow so things can get volatile. I’m expecting the number to be in-line and the total market flat to possible slight upside bias. If the number is in-line I expect AAPL to ramp into the close (late afternoon). For future reference, whenever you see the put OI that much higher than the calls, it is extremely bullish. I’m not going to make too much out of it tonight due to NFP #’s tomorrow. But if this was a non-event week and you see that formation, there is a high probability chance AAPL moves much higher.

07/31/12 (pm) And that is why you come to Aaplpain. This site is home cookin’  – proprietary – anything but ordinary. The $625 strike was chosen Monday night, well in advance, for the 98% range. Hiding 1 step behind the anticipated $620 strike (as your highest OI).

07/30/12 (pm) Seems puts are of little interest so far, which is pretty standard for AAPL. Now that we have the 1st day down as a front week, the OI starts to build a better picture. With the dividend coming, I don’t see the $600 strike holding AAPL under $600 all the way until Friday. I think come Thursday-Friday they will cause AAPL weakness, but not enough to close under $600. This of course, is all my opinion before the market even opens up for Tuesday’s trading. The Fed, NFP or ECB can have an effect on my estimated outcome. The OI is factual data, while I try to give an opinion on it.

 07/29/12 -  As long as AAPL trades in $580 area tomorrow, the $550 puts will not stay the highest OI, it will move up. The OI on the put side isn’t very much, need to see more build up. In general, I’m not looking for much downside in AAPL as the dividend is coming. Last day to buy AAPL for the dividend is 08/08/12.

07/27/12 - Because this is an earnings week and probabilities are not played, I have arrow and ranges on different figures. This will end today.

07/25/12 (pm) A ton of calls closed out today for obvious reasons. I put ranges up just for referance. I think AAPL closes above $550 this week, but no reason to mess around with an earnings week as probabilities are lowered.—-Updated cash ratio graph (here)

07/22/12 - During an event probabilities are not tracked as they are greatly reduced. Earnings is on Tuesday

07/11/12 (pm) Good amount of $595 puts opened today when the stock dropped below $600. I still think AAPL closes above $600 come Friday. If AAPL trades above $600 all day tomorrow, $600 should switch back to the highest OI. Tightened up the 98% range.

07/09/12 - Now that the OI has formed due to today being the 1st day this weekly has traded by itself, you can start to reliably use the highest OI strikes. I think $620 is going to stay the highest OI, but have the arrow and range on the $630 strike. If $630 never becomes, no harm. Also, tightened up the 98% range.

07/08/12 - I have 80% range on $620 in case it becomes the highest OI.  

07/05/12 (pm) $600 call OI was the highest until today. AAPL blew right thru those like they didn’t even exist. That’s a strong sign for AAPL bulls. On Tuesday I tweeted; I was going to think about changing the ‘mode’ from OI/Max Pain to ‘sentiment’ as AAPL was showing it was going to start to trend higher instead of being stuck in a range. On Wednesday I tweeted; “when you get many green cells in a row, a red breakout cell will ensue shortly” (referring to image 1.1 on scorecard). Let’s see how tomorrow plays out with it being a NFP day. So far everything going as called. As in the past, OI expanding higher is bullish. I have the 80% range on the highest OI so you can use it for a day trade/range. The reason I recommend using the 80% range for covered calls and not credit spreads is: the OI can expand all it wants and a covered call will just make less gains, not a loss like a credit spread. If there is major surprise in NFP, I may update things in AM. (I will note the $600 strike in scorecard this week) I’ve been on quasi-vaca/traveling this week, so forgive me for my ‘slacking’.

07/02/12 (pm)  $550 strike was the 98% range Sunday night, I moved this up. There is very little premium on it currently, especially with the shortened week. Sometimes you have to move extremely quick, if you didn’t sell $550 puts at the open, may have missed your window of opportunity. There will always be another week if you did miss it.

07/01/12 - I imagine $600 strike will become the highest OI.  I want to see more OI before setting 98% call range. I am traveling until late Monday so I have limited time to fully study Apple options and outcomes.

06/29/12 (pre) Since the EU event last night, I would keep using the $590 strike on the call side.  

06/28/12 (pm) Left 80% on the $555 strike for the simple reason; if you used that all week, no need to add risk. The futures just lifted higher by 15 points so I’m sure $560 is fine. Point is, any credit should have been sold a long time ago. May move up to $560 in AM. (Note: 80% range was $590 all week, I moved down to $585, need to watch that with EU fix out. Revisit in AM.)

06/27/12 (pm)  Tomorrow things could get a little volatile so I will leave the 80% range where it has been. If AAPL runs up, $590 will become highest call OI, if runs down, $555/$560 will become highest put OI.

06/24/12 -  Let the OI build up since Monday is the 1st trading day there is only 1 weekly. May tighten the 98% range once I see more OI.

06/22/12 (pre) I’m going to switch this up a little. Since we are not machines, I’m going to add a little thought process. I’m moving the 80% back to $600, where it was all week. The reason for this is not so much I think AAPL is going to jump right to $590 at the open, but people catching on to the ‘buy on close Friday trend’ I have written about. I want people to stay safe from when calls close out and or 1hr/30 min until the close when buying can come in. If never happens, no big deal, but I want to be proactive if this is going to become the new trend. Overall, I think AAPL closes $570-$590, but no reason to add risk.

06/17/12 - See how tomorrow plays out. If you want to put on a put 98% type play, I have a high probability calculator looking at $535 (no lower than) as of 6/15 close. Obviously a gap up/dn would change that. But @ $574, the calculator spits out $535+ expiry @ 98% prob. That isn’t using OI, as I like it to build up more before I put it to use.

06/07/12 (pm) No reason to make $570 strike the 80% range. We never had it there all week, no reason to add more risk if you were to take a day position (selling options). $580 call OI worked out as forecasted. I think I may switch it up and do more like this week — put the 80% range where I think. That way, if you disagree, you factually know where the highest OI is at all times. Go in the direction of a more, ‘never take a loss’ than stick to the ‘rules’. (Sorry, myriad ways to use OI and strategies, I’m trying to find best way to represent it for all)

06/06/12 (pm)  Published an article today. I have been wanting to publish this for the past 5 months. Link (HERE)

06/04/12 (pm) I put the call arrow on the $580 strike as I think the $580/$585 becomes highest OI by Friday. If not, no big deal.

06/03/12 - Let the OI build up a little more or at least see where AAPL opens tomorrow. Always good to have more put OI than call (although early). As far as the S&P goes, with CNBC running a Sunday special and everyone waiting for the 1,250 self-fulfilled prophecy, you’re getting near a bottom. I would say you’re within 2 weeks of an equity bottom (rather use time than price)

05/31/12 (pm) I tweeted out a few times over the past few days, “a stall @$580 is of no concern.” I still believe this as it matches up with the option OI. NFP numbers will be released in the AM. I personally think any weak number is already priced in. The $560 thru $570 strikes have close to the same OI; same with $580 thru $590. To take into account volatility in which NFP may produce, I’m leaving the 80% strikes backed off a little and the fact not much OI separates the actual highest strikes. If you like to use the highest OI to trade the stock, you still know where it is. (As a side note and pure opinion; I think risk is to the upside in equities tomorrow, not down)—-Couldn’t have been more wrong if I tried on that NFP opine. 

05/30/12(pm) Moved the 98% put side up to $550. If you sold the put side, sub $550, I would leave it. I personally sold some $530′s and letting them hang. I have arrows backed off 1 strike in case those become highest OI, if never do, no harm.

05/29/12 (pm) Due to the amount of time decay with weeklies, short weeks can be a little tough to make a good percentage return on your risk. There isn’t much premium out at the $530 strike as of tonight. You would have needed to jump on that one right away today. I doubt we see sub $540 this week, but $530 is where the 98% range lies. I don’t see any major moves in AAPL this week. (Unless D10 sparks something)

05/21/12 (pm) It’s best to wait as long as you can for the OI to build up and show itself. I personally like to see what Monday nights offer as it is the first time a weekly, has been the sole weekly. After today’s action I moved up the put and call range from $490-$570 to $530-$600. I try not to move the 98% range against us as much as possible. That reminds me, strike intervals are currently $10 starting at the $590 strike. I don’t think AAPL makes it over $580 this week, but would like to see another day, therefore I have the $600 strike as 98% range. If you sold the sub $530 puts/spreads I would leave them as moving the 98% range has no harm. If you sold $570 call spreads, you can always roll these out.

05/20/12 - If you look on the monthly you will see more puts are built up than calls (looking at single strikes). This doesn’t happen very often and is a bullish sign when it does. I would like to see this happen on the weekly too.

05/07/12 (pm) Still looking for a rangebound AAPL, nothing exciting. If AAPL moves up a little more ,$590 may become your highest call OI (If use 80% range, just letting you know)

05/04/12 (pre-mkt) I am going to see how AAPL reacts today. See if it can hold the $575 strike. The problem AAPL is going to run into or already has, it has zero interest in it right now, but it has also become a source of funds for the facebok IPO. It’s just the way capital markets work. But, as long as we know this springs weakness is temporary, it really isn’t a big deal. Another negative with AAPL being down at this $580 area is, next week’s weekly OI range will shift down, example, you may see $550-$600. I wanted to point that out because if AAPL dips below $575 and comes back thru it, unless it’s for a day trade, I wouldn’t use that as a buy signal. I’m still extremely bullish in AAPL, but like I said in past posts, I think we go range bound for a while.  

05/01/12 (pm) I changed the ‘mode’ to OI/Max Pain tonight. The reason: AAPL has acted perfectly against the OI this week — thus far. On Monday, AAPL went near the put OI and bounced off. Tuesday, AAPL went near the call OI and bounced off. That is the sign of AAPL becoming range bound and obeying the OI strikes. This can change at any time, but for now, it is how things look. Take it day by day. Another reason is, feeling. I just have a feeling AAPL is going to stall out in one of its (the market forcing) typical flatline periods. Others may call it consolidation. If you see AAPL keep getting rejected at the call OI, don’t worry, just a matter of time is all. Keep your time frame open and start looking out to WWDC. Any OI range action or weakness is only temporary and is of no concern.

04/30/12 (pm) Really nothing special happening with AAPL right now from my point of view. Pretty standard operating procedure. AAPL used to sit flat (range bound) the whole year only having 2 massive runs per year. That’s how I got into selling credit many years ago. I would think the market should get some pension fund inflows coming in tomorrow, if so, AAPL will get a little piece of the pie. — As I said last night, I like to see Mondays OI to get a better picture. I moved the 98% range down tonight from $560-$650 to $550-$620. I think the $560 strike would hold, but the $550 has more OI on it for safety.

04/29/12 - I like to see how Monday trades and the OI Monday night to get a better picture for the week.

04/25/12 (pm) Not going to pay attention to OI this week due to earnings/volume. The one thing I will do though, is keep an eye on it and take advantage of any obvious option induced weakness. Say AAPL stays at $610 the rest of the week and on Friday drops to $600 out of nowhere, I would exploit this. But I’m not going to go out of my way to investigate every single tick or sudden pop/drop this week. — Since I don’t have much options talk tonight, let’s turn to the fundies. AAPL obliterated everyone’s figures. Its Gross margins are obscene and only should be seen by a software company (obscene=amazing). Just think of the mind boggling potential that is China, especially when you add-on a carrier with 700M subs (China Mobile). So if there is any dip in AAPL, it is a buying opportunity point blank. Nothing more to say.

AAPL grew profits by 92%. I bring this up because here comes the rub. When you trade at a market multiple, what type of growth is that pricing in or paying for? You are paying for 0%-10% growth. We are so disconnected from reality it is not even funny. The rub: If AAPL’s growth slows from 92% to 10% overnight or even stops at 0% and never resumes again, the P/E is not going to change. It will remain at 15 +/-. AAPL now has $41.01 ttm EPS. It is already priced for 0% growth. Beautiful part is, the downside (stabilized/longer term)  has already taken place or is priced in. AAPL can grow 200% for all the street cares and it will continue to price in 0% growth. So when we start to head down from 92% to 0% one day, big deal, nothing has changed because that’s what the street has priced in since 2008. Sure, if EPS stays at $41.01 forever you won’t have much upside in the stock, but you sure as heck don’t have much downside risk either, especially with a 5% Div by that time.

04/23/12 (pm) Tomorrow at 1:30:01 PST the highly anticipated numbers will be out. I personally do not play earnings for earnings sake. I am always in short puts, long stock, LEAPS and short calls of some kind. My favorite earnings plays are those of risk-free, selling covered calls. (see more on earnings page)

A few things need to be addressed for earnings: The street can be extremely temperamental. What mood are they in and I can tell you if a ‘meet’ is really a beat or a miss of epic portions. Just remember to expand your time frame a little when it comes to earnings. AAPL can come up shy on iPhones by 1M units and the street could sell off the stock by 5%. You have to think bigger picture, cause the street doesn’t. That is one of our advantages.

Example, the October qtr. AAPL came up shy when they reported 17M on 20M consensus. That was a huge miss if you had a 1 week time frame instead of months. The point is, become smarter than the street. If you model or know AAPL will report 80 M units in 2011, I don’t care if they report 1M in the 1st qtr. I know the end game number has to come sooner or later. Back to the Oct story — AAPL missed by 3M units. Guess what happened in Dec though? 30M was consensus. What did AAPL report? 37M. Case closed. Those who knew, were in the know.

Looking further out, AAPL trades up and down of 5x’s cash. By Oct ’12 AAPL will have close to $130B cash = $650. If you want to go off earnings, AAPL will have around $46+ EPS x 15PE = $690. A graphic in forward thinking I always turned to if I ever have doubts, is this chart by Horace Dediu. (link) If you think smartphone growth is done, well, you just haven’t been shown the facts.

My play on earnings is opportunity. If AAPL soars higher, I have the opportunity to sell some of my short-term long exposure. If AAPL craters due to an actual miss or a manufactured one (i.e, missing GM by .1%) then I have plenty of cash to steal the stock at a price you can’t go wrong at. Either way, I welcome earnings, as it may bring the fruits of our labor now or at a future date. But one thing we know for certain, that day will come. It’s pure mathematics.

04/22/12 - Earnings are on Tuesday. Probabilities are not tracked during events. Probability is greatly reduced during events or high volume. Using the highest open interest strikes will be of little use until the event is over.

04/12/12 (pm) Ok, I’m going to step in right about now. Too much chatter. I’ve been at this Apple game for a long while. Foot-stones were followed from the best Cats in the industry: Namely; Turley Muller and Andy Zaky. — I’m telling you right now — fear of an AAPL miss will start running rampant. This is to be ignored — better yet — bot.  AAPL may have more weakness coming next week, due to Monthly Opex. We may even see $599.xx. Guess what? We may not (this is where selling CR is supreme). You need to remember — stay high probability — concentrate where AAPL won’t be on 04/21. I leave you with this; See what others don’t. Does it really make cents — AAPL @ $600.00 when they are about to unleash $40.00 in EPS? Remember, keep it ‘Fact Over Fiction’.  Watch, I bet  AAPL, all of a sudden has alpha against the SPY tomorrow. What’s the reason? Puts…

04/11/12 (pm) A little recap: The typical Monday/Tuesday rise in AAPL occurred once again. I still consider Tuesday an ‘up’ day as AAPL soared higher even making a fresh ATH. When using the up Mon-Tues routine, it is not set in stone. Sometimes the peak is intra-day Tuesday, sometimes it’s Wednesday. The main focus is on the trend higher, not the close. The reversal Tuesday was perfectly normal and not worrisome one bit. Again today, AAPL being down $13 from the open was right in the options expected range. Now that AAPL is such a high dollar stock, $20 moves are going to become extremely common. As for the rest of the week, I would expect AAPL to keep doing what it’s doing and hang out within the OI range. I left the 80% range on the $650 strike because if AAPL does gather some strength tomorrow, it will become the highest OI. That brings another point. Watch AAPL if it gets up to the $630 strike tomorrow. If it keeps getting sold off, I doubt we expire above $630 this week as there are not enough buyers to power thru it. If AAPL can get thru that strike, it would be a good sign. Also, those puts building higher than the calls is always a good thing to have on a bulls side. — I will go over in a video on how you would use the $630 strike as a sell signal this weekend. Easier to show, than tell. AM - Switched 80% range to track highest call OI

04/09/12 (pm) So far the market and especially AAPL took the NFP number in stride. I don’t see the S&P having some big correction anytime soon. There are myriad reason I believe this, including too many S&P puts bot. Switching back to AAPL, it looks really good. Don’t be alarmed if it swings in a big range. I want to see another day of trade for the OI but realize time is money too. Therefore, I have the 80% range where it should build for the call side — if it never does, no harm. If you like to use the highest OI at all times, you still know where it is.

04/08/12 - I would wait to see what the OI looks like Monday night before doing anything. If you check the SPY Monthly, I wouldn’t think the market expires much below $135 for April OpEx.

04/04/12 (pm) AAPL closed the AH @ $623. It looked like AAPL had a good amount of buyers in the stock today. Tomorrow will be a great gauge of strength. AAPL should get hit from selling pressure caused by option hedges unwinding. If it does have heavy drops, closing in the red, just remember, you know ‘why’. — If AAPL refuses to get sold off near the $630 level tomorrow, know, that gives us a tell. It proves AAPL has no sellers in it, only buyers. –(Will ad in AM if see different)

04/03/12 (pm) Note from last night still applies. I think the $630 strike gives AAPL too much selling pressure and it is not able to sustain. Tomorrow is the equivalent of a Wed/Thurs due to the short week, therefore weakness is fully expected. Will add in AM

04/02/12 (pm) As mentioned in this weekends video, we continued the Monday up trend as options artificially moved AAPL lower on Thursday-Friday mixed with qtr ending. — Since this is a short week, keep an eye on options causing weakness earlier than it would in a typical week. If AAPL can power thru $620 tomorrow, then $630 would be your next target. Up next would be $640, but like I have mentioned before, AAPL moving up that high would cause too many calls to build up for $640 to be sustainable. More than likely $630 wouldn’t be sustainable either. — If AAPL gets rejected at $620 tomorrow or goes thru it but closes sub $620 and we have a bunch of sharp drops, I wouldn’t be concerned as the options market holds our explanation.

03/28/12 (pm) It’s always a bullish sign when the call OI is expanding. It means AAPL can soak up all the shares being sold (qtr end played major factor this week). The opposite would be true if this action was on the put side. On Tuesday I was tweeting with someone saying I think $620 will become your highest OI for Friday, I continue to believe this. I think the call OI stops expanding right here. If that happens to be the case, AAPL will have an extremely tough time staying above $620. Let’s continue to watch AAPL at the $620 strike, if gets sold off, you know the ‘why’ — if continues higher, there are zero sellers and extreme bullish momentum continues.

03/27/12 (pm) I will keep moving the 80% range as the highest OI moves. Due to such a broad audience and a plethora of strategies, I will always have the most current data. Notice the 98% range has not changed against you as I have already taken into account the stock price movement. Again, I like to supply the data, but leave it up to individuals on how it’s applied. May add more in AM, but AAPL still looks fine. – AM As you can see, it’s bullish when the call OI expands. Unlike last week where it didn’t.

03/26/12 (pm) If you go check out the monthly $540/$550/$560/$580 puts, they all came down by 13K OI. Volume started picking up in the $540 strike or really all of them around 10:30 AM PT. This is when the stock started to ramp out of nowhere. Put spreads closing caused todays buying pressure in AAPL at 10:30-10:45AM PT. As far as the weekly graph goes: With end of qtr buying it’s hard to say what happens. When large funds buy, options have little effect. With that said, I would think if AAPL is above $610 on Wednesday it will have a hard time not slipping into Friday. I want to see how AAPL trades without the put activity causing buying bias. Tomorrow should be a good tell for the stock. Overall, nothing wrong with The AAPL. No correction in sight as far as options say.

03/22/12 (pm) This is the exact action I expected and mentioned all week. I like to keep it high probability and stick with the 98% range. If you wanted a more fine tuned opinion on where AAPL closes tomorrow, I’d say $595-$600. A picture perfect close will be $600. Let me see the 1st 30 min of trade and I can get you a more refined outlook for the close.

03/21/12 (pm) Everything continues to look fine in AAPL. The sell-off into the close was 100% expected. A close under $600 is perfectly normal. If AAPL were to run well above $600 and close above it, well, that’s not so normal. It would mean AAPL is about to explode higher. A close under $600/$620 is a play on probability. A close well above $600 is a play on strength. It would let you know sellers are yet to be present.

03/21/12 (am) I would keep watching AAPL at the $600 strike. If AAPL closes above it on Friday it would mean we have no sellers in AAPL and value funds are still plowing in. I still have that feeling $600 strike will cause selling. Either way AAPL shows no signs of bearishness or a directional change.

03/19/12 (pm) I need to see AAPL trade more now that the dividend news is out. I want to see if  value funds continue to buy or if they back off for a little bit. If AAPL is now open to a whole new slew of funds and they buy it hand over fist, the options market will not be dictating that kind of buying. But I still feel that $600 strike is going to come into play causing the normal Mon-Tues up, Thurs-Friday down. 3/20 am - Since that $600 is so high, I changed my take on the put side for risk trades. I’d wait until one of the put strikes builds a higher OI. Still can use as buy/sell points.

03/18/12 - I expect AAPL to announce a Dividend tomorrow. All this has been expected. This is why I reiterated 100x’s, the stock move is not about product launches or earnings etc. It has been about value funds coming in for that $106B payday. Since this special conference call is coming tomorrow, I would completely ignore the call OI. Let’s see what the news is and go from there. The options will be adjusted unless the Div is minuscule. On a side note: 9K Call OI is high for a Sunday night, this may be one of the few times where that is a bullish sign as someone saw this coming. – Additional note on the monthly graph. 

03/07/12 (pm) Keep it short tonight. Everything is going per plans. Looking for AAPL to close out this week in a nice range. On the monthly opex you got those $530 put closing out pretty quickly, I sure would like to see some added as, more the merrier. If too many close could run into snags but cross that bridge when get there.

03/06/12 (pm) Remember, the OI graph is pure data. If you ever think my opinion on the data is wrong or too conservative etc, feel free to take what you have learned and apply it to your trading style. — Monday the highest put OI was $530, stock bounced from that level and closed higher. Tuesday highest put OI was $520, stock bounced from that level and moved higher. That is pure options market at work showing you where buying pressure will come in. It worked to perfection. I think you started to see some strength in AAPL today not only from the $520 weekly puts, but you had some of those $530/$550 monthly puts closing out as spreads. — Bigger picture, I’m not looking for a deep (sub $500) pullback in AAPL. I am looking for it to go into an OI/Max Pain range. Bouncing off the $520 was the 1st step to this call being correct. Next I am looking for the monthly puts to give us just enough juice to close out March 17 opex right in a range of $530-$550. — Note iPad event tomorrow so my forecast may get blown out of the water, letting you know my thoughts is all.

03/05/12 (pm) Have my take in red due to iPad event. I wouldn’t make any credit spread trades using highest OI strikes. Probability is greatly reduced during events/high IV. Notice how the strikes spread out as did the IV. — As far as today goes, you had someone liquidating a position/partial. I mentioned, watch how the stock acts at $530, which did end up bringing in buying pressure. This was a good sign intra-day. When I keep referencing the $530 strike, I am using the monthly. So now this brings in a problem as you can see the weekly put OI is at $520. I have repeated “AAPL is bullish until it goes down to the put side” — Well, what happened today? We finally went to the put side. So things have changed. What throws a wrench in this weekly OI is the ipad event. Because IV goes up, so must the strikes widen. So now I don’t know if the put side expanded due to a directional change taking place or just due to the event.

So what I am doing is staying neutral at this moment. I will keep watching AAPL at the $530 area and look for buying pressure. Anything can happen this week and it may be short-lived as the real action will be next week. Example: Say we go down to $515 this Friday and the monthly $530-$550 puts stay the same OI. At some point by monthly opex those put holders are going to take their profits. This should cause buying pressure and if the buying can pass off to the stock side of the market, then up it will go. (Even if you have big spread positions in those puts, commercial money would be long their deltas so it would still cause buying, although not as much if wasn’t spread.) Overall I’m neutral pending event and seeing if buyers continue to show up around the $530 area. If no buyers show up, not a good sign for bulls — this week at least.

03/04/12  - This week we have an ‘event’ with the iPad 3 launch. We need to continue watching how AAPL reacts at high OI strikes. If we go towards the $550 area, the trend would remain intact. If we head towards $530 area, pay very close attention to how the stock acts. You should see buying pressure come in at that point. If you do not, than buyers have run dry and we will be heading lower. Bulls hold a huge advantage over bears right now as seen on the monthly OI graph. 11K $530 put contracts were added on Friday bringing the total to 19K or about $11.4 M worth of protection. Let’s use a hypothetical and say AAPL sells off to $500 very quickly. Those $530 puts will go from buyers paying out $11.4M for them, to cashing them out for $47.5M. And just what do you think those put buyers will do with their new riches? Maybe use the massive gain to buy the dip they were expecting? — Now look how many puts there are on the monthly, that same scenario will be true for any of those strikes that go ITM. This is why I say bulls hold a major advantage. #1 All those puts should start the buying process where it passes the buying torch to the total market. #2 If AAPL does sell off to $4xx/$5xx, you are going to have big gains from the put holders, and just where are they going to deploy that new money you think?

03/01/12 (pm) Congrats if you sold the $500 area puts early in the week or thereabouts. Options have shown nothing but bullish behavior. AAPL closing $530-$545 tomorrow is expected. What happens if AAPL opens and stays above the $545 strike? If that’s the case, you have absolutely no sellers in AAPL and it would be extremely bullish. If AAPL gets hit at $545 and stock tumbles, be glad you know the ‘why’. I may update this in the AM or follow twitter/ST for intra-day.

02/29/12(pm) There you go. Call buyers left some positions on, unlike yesterday(when positions weren’t left on yesterday,not bullish or bearish, I just thought was funny no one thinks AAPL can go higher). Repeating more of the same, but you see how the $500 put OI has stayed the same all week and the call side is the one moving up? That is your bullish sign. If you are an aggressive type trader, you can try to play around in that $520-$530 put area. A good sign for bulls is the $520/$530 put build up. That should offer buy pressure if AAPL moves down there. If you want to play call side, I continue to recommend covered calls only.

02/28/12 (pm) Even the weekly spec call buyers don’t believe in the  move anymore. Hats are thrown in the ring.—- As far as the options market — nothing has changed, AAPL still looks good.

02/27/12 (pm) Apple still looks good, no sign of a directional shift.

02/26/12 (pm) My take is in red as I always like to see Monday trade and the OI build up more before I give opinion. If you go look at the SPY weekly — not a good sign — as of now. When the call OI builds up higher than the puts, it’s a bearish sign and a possible signal of a top. Keep a close eye on that and watch how the SPY reacts at those call strikes. Hopefully that was just a weekend thing and massive put buyers come in Monday. Since the market trades together, I want you to be aware of this.

02/24/12 (am) Seeing pre-market I’m changing up last nights comment. #1 Apple is still in bullish mode. Watch how Apple reacts at the $520 strike. One of many strategies if your a day trader is a buy-write today using the $520 strike. I put the $525 strike in black as I want to see the open 1st but I imagine it holds. Will post market hour thoughts on twitter.

02/22/12 (pm) AAPL got hit every time it got up to $515 today, obviously some commercial paper did not want AAPL up there. This would normally be a sign AAPL is not going above $515 for the week. Being that an ‘event’ is taking place, ‘normally’ doesn’t apply. As far as tomorrows shareholder meeting goes. If you are a long-term investor, all noise. If you are short-term trader and feel like you need protection, I would sell some covered calls as IV is elevated. If you’re looking to buy dips, you can sell some puts at the strike you want to add or just wait it out. I don’t think they talk about a dividend and the stock will probably sell off. How much? I have no clue. I would welcome this though and buy the dip. (no time frame on dip) Side note: As seen today, you can still use the OI strikes for buy/sell points, I just wouldn’t recommend selling credit spreads during news/event times.

02/21/12 (pm) I am unsure of one thing. Is commercial money planning on a dividend date being announced during the April conference call at the earliest like I do? Or did the whole market get caught up in the retail community; of a Dividend date coming on Thursday? Since I have no clue what is to come, here is my outlook. Super simple. I am long like always and have cash ready. If you get a major sell-off when no Div is announced, I will be a buyer hand over fist. If you get no Div and no sell-off, no harm. As far as the OI this week. I am looking at this like an event, I would rather step away than put a risk trade on either of the strikes — for now. Making me even more cautious is that $485 put build up. For right now, I’ll step away from risk and watch. Will have some trade/protection thoughts Wednesday night (I really only consider CR spread risk) – (Remember, the OI graph is not my opinion, it is stat based. The comment section is my opinion, if yours differs, no big deal.)

02/10/12 (pm) This is what the OI actually went out as for OpEx. ITM is not recorded; that’s why you see ITM flatline. You will not find this data on any regular site. We had over 70K contracts trade on the $495 calls today. Only 8.4K were left open. 46K $490 puts traded today, only 12K were left for dead. This is why AAPL stock is a derivative (most times). To keep it simple, you had a rush of $495 calls close today — this causes selling pressure. You had a rush of $490 puts close today — this causes buying pressure = $493 close. Mentioned this on a tweet @ 10:45AM today.

02/08/12 (pm) It is very bullish that the call OI keeps expanding and it doesn’t even have an effect on AAPL currently. On Tuesday, $470 OI was stalling AAPL, but other than that it keeps powering thru soaking up any selling pressure. Same notes apply since earnings. AAPL’s valuation is finally being discovered and you have limited people willing to sell shares causing current price action. This has been going on since $450 (ER) so if all of a sudden tomorrow, AAPL doesn’t go up to the highest call OI don’t worry. It can only expand so much in a week. I have the $485 in black as I have no desire to call a top. I imagine it holds but would only play call side with risk-less type trades. I will do my best in trying to catch a reversal in AAPL. Notice the put OI pretty much stays constant and the call side is the one that keeps aggressively moving? That’s how you tell direction and power. The put side is stable and AAPL has stayed away from that side since November. When you reverse, everything you are witnessing will be just the opposite, on the put side. Or you can stay flatlined, in that case AAPL would just hang out in the center, favoring neither side.

02/08/12 (pre) - There are just no sellers in AAPL whatsoever. We need to see the open and how AAPL reacts at $470. If AAPL can blow thru $470 no problem, then I don’t see this train stopping anytime soon. - AM - You are running into a sellers strike. I don’t know if $475 will hold or not. I’m going to keep  it simple and say AAPL is bullish as it keeps running up to the highest call OI ever week. Until this changes, bullish is the price action.

02/06/12 (pm) Because it is Monday night and the $470 OI is only 400 contracts lower than the $465, I am going to treat my 98% range as if $470 is the highest call OI. In other words I am playing it safe by anticipating an OI shift. If it never happens, no harm. As the week goes on you will see the range take shape and stocks reaction. Remember, the highest OI strikes represent ‘won’t go below/above’ —  not — ‘will get to’. With that said though, surprised $470 OI gained this much steam, definitely not a bad thing for bulls. 2/7 AM - I changed out the chart, thought it would be better to anticipate strike shift for all. (moved 80% and arrow)

02/03/12 (am) With the big NFP surprise today, keep an eye out if volume comes in AAPL to help push thru $460. Remember, big volume buying will easily overpower options. If volume continues to be low/avg, I think $460 will be a wall like it has been all week. Will update a few hours after trading. 6:35am - I have one sentence for what your about to witness and have all week. Open Interest Max Pain. 9:15 AM - If AAPL stays up here($460), watch for 35K+ $460 call volume and 12:00-12:30 PST, when calls close, so will go the wall.

02/02/12 (am) – The put strike moved up to $450, if you made any risk trade using $445 I would leave it. If using strikes as buy/sell points then $450 is fine. Just watch AAPL or the option volume as it can switch back to $445 quite easily. If we stay stuck under $460 this week, I imagine you know why.

02/01/12 (am) Bullish sign the call OI expanded and even more bullish if AAPL runs right up to $460 or thru it. Yesterdays note still applies, steady as she goes. - 6:40AM PT - Just tweeted out, changing tune since I saw the open, give it a little more time but you see how $460 got rejected real quick and AAPL major underperforming SPY, this tells you $460 is probably going to cap you this week. Plus Mon-Tues AAPL gets to run free, Thurs-Fri gets put in place.

01/30/12 (pm) - Steady as she goes. Notice AAPL keeps running up to the highest call OI strike every week. This indicates no sign of a reversal yet. Still in sentiment mode, not concerned or betting on the call side holding. When AAPL is in OI/Max Pain mode the stock would not behave like this. It would spend a lot more time in the middle of both the put and call OI instead of continuously hugging one side like it has been doing for weeks.

01/30/12 (am) I have the $455 call in Red. I think AAPL is so cheap that the options market is simply not going to be able to hold AAPL. I think the major reason the call strike is so low right now ($450), is people are strictly looking at stock price. $450 seems so expensive and how can it go any higher? Once valuations sink in, the OI should expand in the coming weeks. ($440 put in red too, but for a different reason, waiting for OI to build up more)

01/26/12 (pm) I’ll update in the AM. I imagine $450 call OI will hold us down. As far as where AAPL closes. Look at the volume on the weeklies. $450 weekly calls will more than likely have the highest volume, therefore capping AAPL at that strike. The put side is a little more tricky. The reason; we don’t have any high OI on the put side up at this level. Say we had high OI at the $445 and $445 put volume was the highest. It would be extremely high probability $445 would hold. Since we don’t have any OI on the put side, I mentioned can be difficult to gauge close. Whichever put strike happens to be the highest volume, look for this to hold AAPL. But for the above reasons it may not be enough support. It is possible to lose a strike. You will just have to see how stock reacts tomorrow to those strikes. - AM - Looks like enough buying interest at $445 and the $450 call OI will cap us today. I’d say expiry will be somewhere in between.

01/25/12 (pm) Now that Apple has reported earnings a few things come up. Their earnings power is so great, Wall st will finally have to come to their senses a little (not a lot) plus with cash of over $100B by now, P/E compression will come to a close. I really don’t see Apple selling off much more as it’s at valuation levels not seen since last decade. In other words, I would be in ‘buy the dip’ mode rather than sell everything and hope for 10% lower. Looking to the options, I continue with event week. During earnings the options market changes. You get a lot more covered call sellers than normal. You are going to have a bigger mix of long/short $450 calls than usual. This is why I can’t give you a high probability outcome if $450 holds or not. You will just have to see how stock reacts at $450. If gets sold off, then we have to wait until next week. If goes thru it, shows a lot of those are short calls. For people looking out further than day-to-day, don’t concern yourself with this.

01/25/12 - You can’t use the OI this week or at least not yet. It is not going to tell you anything. We need to let things play out. You are going to get a lot of jockeying of option positions (closing/rolling) and profit taking. Over the next few days you are going to have analysts come in and be forced to upgrade their numbers moving AAPL higher. So things can whipsaw for a little while. I am going to keep it simple and sell some covered calls today as some protection while I wait for a clear signal from the options market. On a PE/trailing growth metric, I have never seen AAPL trade this cheap. It is trading 13 cents on the dollar.

01/23/12 (pm) Earnings plays: See earnings page for some more ideas. Info is dated but still applies. Overall, you want to be selling some premium (options) of some kind tomorrow. Sell a 15%? OTM covered call if your extremely bullish, just to get some sort of income going. If you don’t hold any AAPL or would like to add more, sell a cash secured put 10%-15% OTM? Anything you want. Might as well get paid to buy a pullback. Are you neutral and extremely nervous? Sell some ATM covered calls, there is huge protection in those. I am bullish AAPL and not really concerned with what happens tomorrow. If something goes wrong and Wednesday AAPL trades down, I’m not worried as it will be another buying opportunity. Good luck. (I sold full position Feb CR spread in portfolio model this am. Will sell covered calls tomorrow.)

01/21/12 - See monthly note, same applies. – Do not be concerned with Fridays trading. It was options related. 125% more calls traded on the monthly than puts, this caused selling pressure. Monthly opex closes ‘Red’ 84.2% of the time, with 84.4% of a green Monday at some point. I expect this to continue. I am looking for AAPL to trade higher into earnings. We have to take the OI with a grain of salt because an event is near, but look at that put build up. The media says everyone is overly bullish on AAPL — really? Not what actual money is showing. This chart looks similar to JAJO or past weeklies when AAPL started its run from $360/$380. It also looks like the frames page too. Again, don’t look at this as a for sure thing because event — but it definitely isn’t a bad thing to have a put backstop on our side.

01/12/12 (pm) The highest OI on the call side just became $425, If you made any risk trades using the $430 as the highest OI, don’t roll it down. Keep acting as if $430 is the highest OI. If using as conventional buy/sell points then $425 is fine. AM Comment- I think you will stay around $420 and OI/max pain will strike again ($415-$425 close) Just keep an eye on the highest volume strikes today to get an idea of the close. Due to how the monthly OI is setup, I think it’s high probability we open higher on Tuesday.

01/11/12 (pm) Don’t be concerned with AAPL stalling this week, or so far. It keeps hitting that $425 OI and gets knocked down. I made a comment on the monthly graph if you want to check out.

01/09/12 (pm) Quick note: I talked with the CBOE recently and asked that their DPM make a market in deeper Jan’14 calls. I got confirmation, as of tomorrow Jan’14 $230/$235 * $220 - $275 calls will be available for trade. So if you have Jan’13 DITM LEAPS you want to roll, have at it. —- I think $410 will hold on put side. I think $435 would too, but left it in black (neutral opinion) as I have no desire to make risk trades or call a top on the call side. Don’t worry if we hang out for a week or so, you will see more new highs before 01/24. * Because AAPL dropped they were allowed to go lower.

01/06/12 (6:45am) $420 will be a little resistance point. Don’t even be concerned if we stall there. Concentrate on how AAPL keeps going right to the highest OI = bullish. If AAPL floats $420 +/- all day, watch for about 25K+ volume on $420 calls and then AAPL would be clear for take off towards end of day. If it gets stuck to $420, then Monday will pop. Also, look at the SPY call OI on the weekly, it looks like giving selling pressure to it. This may contribute to AAPL sticking to $420. Overall, trend still up, ignore today if more opex drama.

01/05/12 (pm) Great sign that AAPL was able to break out of the call OI. That means buyers are just too strong. Whenever AAPL has broken the highest OI, it is never a 1 week thing. It will keep pushing higher. This is where this site comes in and using sentiment to forecast future moves. In other words, how a stock reacts at the highest OI strike will tell you everything. It’s very bullish that the OI expanded tonight from $415 to $420. That’s how you can also tell the move is still to the upside and isn’t done. Just using an example: say the OI kept moving everyday up 1 strike, that means plenty of room to upside, all buyers etc. But 1 day (or week) it stops. All of a sudden the call OI stays stagnant and AAPL runs to the put OI. That’s your reversal sign. — As these things come up, I’ll show you in real-time. Just wanted to get some knowledge out there though. Will come back in AM and give some thought after NFP #’s.

01/05/12 -Pre-mkt) You see how AAPL keeps running right up to the highest OI every week. That is very bullish and how you can tell the trend is still up. When AAPL stops running up to the highest OI, that’s when the move will stall and flatline or reverse. If it reverses you will know it as it will do the same thing, just opposite. AAPL will run right to the highest put OI. That’s how you catch tops and bottoms in AAPL. We are at $415 right now. I have no desire to say $415 is going to hold. If $415 gets rejected — nothing new to us as we know why. If $415 gets taken out than there are just no sellers and higher we will go. In the bigger picture from a few weeks ago, I’m still basing a move higher off of that JAJO graph. The options market the past 6 weeks shows no top. The range is $380 – ???. Since we are close to earnings I am not concerned with playing OI/Max Pain, but using options as an indicator.

01/01/12 – Added a new stat sheet to the ‘Scorecard’ Page. “Friday Close vs Monday Close” — New Article on Pinning and OI/Max Pain. They are very different. Link (here)

12/29/11 (pm) Watch the volumes today. If $405 volume is the highest, it will stay around that strike. If AAPL runs up to $410 area and that is the highest volume, then the same will apply as last week. Wait for about 40K+ volume and 30 minutes of trading to go and AAPL would be allowed to advance. I will come back this afternoon and give update on what I see. Update 9:30 am PT. Because the $405 volume is the highest on the puts and calls, I don’t see AAPL moving from $405, not even end of day. Take that back, if it did move it would be then.

12/28/11 (pm) Today is perfect example of how you can use the highest OI strikes as buy and sell points in the extreme short-term. Where was the high today? near the $410 call OI — this is your sell area. Where did AAPL bottom? near the put OI of $400 — this is your buy area. I am still looking for a move higher in the bigger picture. I have ‘my take’ in black on the call side as I have no interest in the call side holding or not. In other words I am not in OI/max pain mode where I would put risk trades on the call side. This week is looking a lot like last week. Where we may hold under $410 until all those call buyers close out, then end of day Friday we move up $5.

12/23/11 – Comment from yesterday still applies. 1 addition today. If AAPL floats around $400 today +/-. Watch for the $400 weekly call volume to get up around 50K+. If this happens it will be with about 30 minutes to go. If all that lines up — this would be the time AAPL is allowed to run past $400 as majority of the $400 calls closed out and option seller liability is no longer present. (much less present) – Post script: If breaks and holds above $400, proves there are no sellers.

12/21/11 (pm) Same applies, if $400 gets rejected nothing new. If we can break thru $400 then it is extremely bullish. I’m already looking for a big move higher, whether it happens in the face of 20K OI calls or not will tell you how aggressive the move will be.

12/20/11 (pm) – “Stock splits do nothing” — is laughable. Proof is seen above. 20K OI on an option that expires in 3 days? Anyways. Keeping to the ‘illusions video’ we go much higher (next 4 weeks) . I cannot stress enough, if we hit $400.xx and AAPL gets obliterated — know ‘why’. It is nothing but options moving the stock. With that said, JAJO and I see things clear and off we go. (fits and starts may apply)

12/20/11 (after open) Changed my take on $400. Going with my video “exposing an Illusion” I am not trying to gauge a top in AAPL. If your going to sell calls I would only do covered calls (ones you can’t lose money on)

12/06/11 pm – Keep watching that $400 level. If we get near it like Mondays $396.xx and keeps getting rejected, know it is options related and nothing more. If we can break $400 by a strike plus, then new highs will ensue.

12/02/11 – Everything points to breakout and “Frame 4”. I’m switching over my site this weekend so may be down for a while.

12/01/11 – I haven’t seen the highest OI on the same strike in a long time. Right now the OI/Max Pain is not even on my radar, using OI to discover a breakout is.  We finally broke thru the call OI which I have been waiting for. When that happens it says Wall St no longer desires to keep AAPL under the high OI, or they simply cannot because buying pressure is too strong. Breaking the Call OI is made official on opex — so let’s see Fridays close. Tomorrow could be tricky or misleading with the NFP number. I will revisit with a comment in the AM. (There are cycles;  max pain, breakout/down, max pain, breakout/down….This is why I have “my take” in red on the call side. You would want to stick to 1 side during a breakout cycle if doing risk trades)

11/30/11 (7PM)  Why did AAPL news turn positive today? Today is the first time the reg media had good news. You need to be aware of this. The “Wind’ of change is right around the corner. Check out the “Frames” page. Somehow, someway we will get over the call OI. If we can close a strike + over the high call OI, it’s over Rover….. Why? Because it has actual tells, real money involved. If aapl can break the call OI = sellers are no more. At this point all you need to do is wait for buyers to step in. Thats where we are. Why did aapl keep bouncing off $380? Just random number? Random line? You think something above had to do with it? — Let me be clear. There is a time for OI/Max Pain and there is a time for option sentiment. I am in option sentiment mode right now looking for a breakout. Options will tell you all you need to know, just gotta listen.

11/30/11 – I switched my take after market open on call side, I’m just waiting on any time now the call OI will break.

11/29/11 – $370 puts are the true high OI by ~100 contracts. Just keep using the <$360 strikes for risk trades. With all the EU events,careful trading this high IV. The put OI is pitiful and calls are dominating once again. Notice we bounced off $380 area today and straight down. Even if you just watch this data and never trade it, it helps to know why aapl came down off $380. Makes things easier to understand and realize nothing wrong with aapl, it’s just options.

11/27/11 – So far the put OI has stopped moving down and $350 has become the put backstop. Now we need to overcome the calls and it’s off to the races. Sure wish the call OI was around $370 or lower.

11/23/11 – Love it, what do we have here? Go over to the “Frames” page…..think we’re building frame 3, I do. Remember how the put OI was getting blown thru past few week’s. Remember I said look for that backstop on last week’s Vid. Boom; your getting $350 puts trading on multiple boards. Now careful, as of this writing ES just took a 1.5% bath in matter of seconds so watch the global/debt risk. Back to AAPL, see how, again a $25 OTM strike just ramped in OI. When was the last time puts ramped, I know, 10/24. What you want to see is exactly whats playing out, the puts to build a backstop and the calls to close in on it. The calls will get so low on all the boards, buying will start and there is not a darn thing they can do once AAPL jumps over the highest call OI.

11/22/11 – At this point in time, I’m not so much using options as a Max Pain outlook. I’m using the options to gauge when the bottom is in and AAPL will break out from the high call OI and make that $50 run. There’s a time and a place for Max Pain where the stock is stuck. Theres a time to use this data to find a bottom or breakout. We are in bottom/breakout mode with Max Pain secondary. I would use covered calls for your call side selling if thats the side you choose.

11/21/11  – You know how beautiful this graph looks? Very. What stands out? Calls are in chaos. Yes, once again the calls are dominate in aapl (typical, why trades low P/E) but look how the puts are precise, small, yet precise. This is what I’m talking about. Watch for a backstop like this and the calls to keep coming in. The calls will over pursue (football analogy) and see ya, stock will run. Don’t get too excited but check out the “frames” page I have. You want all the calls to build at $370 e.g and puts stay “stable”. My take is green on the call side @ $395, but when it switches to $375 it won’t be. Thats the plan, Stan.  (updated 7:30pm, You see how the put OI built on a $20 OTM strike? Thats means something)

11/20/11 – Waiting for more OI to build for “my take”

11/29/11 – $370 puts are the true high OI by ~100 contracts. Just keep using the <$360 strikes for risk trades. With all the EU events,careful trading this high IV. The put OI is pitiful and calls are dominating once again. Notice we bounced off $380 area today and straight down. Even if you just watch this data and never trade it, it helps to know why aapl came down off $380. Makes things easier to understand and realize nothing wrong with aapl, it’s just options.

11/27/11 – So far the put OI has stopped moving down and $350 has become the put backstop. Now we need to overcome the calls and it’s off to the races. Sure wish the call OI was around $370 or lower.

11/23/11 – Love it, what do we have here? Go over to the “Frames” page…..think we’re building frame 3, I do. Remember how the put OI was getting blown thru past few week’s. Remember I said look for that backstop on last week’s Vid. Boom; your getting $350 puts trading on multiple boards. Now careful, as of this writing ES just took a 1.5% bath in matter of seconds so watch the global/debt risk. Back to AAPL, see how, again a $25 OTM strike just ramped in OI. When was the last time puts ramped, I know, 10/24. What you want to see is exactly whats playing out, the puts to build a backstop and the calls to close in on it. The calls will get so low on all the boards, buying will start and there is not a darn thing they can do once AAPL jumps over the highest call OI.

11/22/11 – At this point in time, I’m not so much using options as a Max Pain outlook. I’m using the options to gauge when the bottom is in and AAPL will break out from the high call OI and make that $50 run. There’s a time and a place for Max Pain where the stock is stuck. Theres a time to use this data to find a bottom or breakout. We are in bottom/breakout mode with Max Pain secondary. I would use covered calls for your call side selling if thats the side you choose.

11/21/11  – You know how beautiful this graph looks? Very. What stands out? Calls are in chaos. Yes, once again the calls are dominate in aapl (typical, why trades low P/E) but look how the puts are precise, small, yet precise. This is what I’m talking about. Watch for a backstop like this and the calls to keep coming in. The calls will over pursue (football analogy) and see ya, stock will run. Don’t get too excited but check out the “frames” page I have. You want all the calls to build at $370 e.g and puts stay “stable”. My take is green on the call side @ $395, but when it switches to $375 it won’t be. Thats the plan, Stan.  (updated 7:30pm, You see how the put OI built on a $20 OTM strike? Thats means something)

11/20/11 – Waiting for more OI to build for “my take”

11/11/11 – AAPL is a manipulated stock. You can drop rumors at any time and it is the only company that will keep mum so you can ride rumors to move the stock. The one thing max pain cannot handle is volume/event type situations. You had huge volume on the open yesterday and just no buyers. Whenever you have this, max pain isn’t going to stop it thats for sure. Another thing, look at how there are just no puts and way too many calls. As long as you have that many calls, AAPL is going to have a very hard time going higher. Ignore the ranges as yesterdays rumor event, mixed with no put OI made max pain take a back seat this week. You will have a little buying with the ITM puts closing tomorrow but you need help from real buyers to go higher. As you saw the put OI was never very high or stable this week, we now know we should have never touched the put side. Let’s watch tomorrow and learn from this. I think we still finish $390 but thats just opinion. I changed the ranges in case anyone wanted it for day use, don’t worry, I will reflect this whole week in the scorecard, not just as a simple green area.

11/10/11 – Not much you can do about all these EU headlines and volatility. Weeklies are tough to trade because OI takes a while to build up and stabilize unlike monthlies. It isn’t normal for the OI to change around this much but it also isn’t normal to see 3% moves in the market everyday either. To be fully documented on 11/10 I put up my green 98% range at the time was $395-$410. I have to change it to current for anyone new that wants the correct data. When the OI is changing so much on 1 side it’s trying to find a home. It’s best to let it find it’s spot and then make a trade. Basically built on rock not sand type thing.

11/08/11 – OI building up now, not as high as I like on the put side but I think the $390 will be the one that keeps getting built on so it will hold.

11/07/11 – My take is red because need more OI to make a risk trade.

 

Historical Posts for Monthlies

11/15/12 (pm) I expanded the whole scene for expiry. You’d be hard pressed to find a long call holder ITM.  [The actual highest OI graph differs from my range I've had all month. Transparency is the reasoning. The graph is real-time. My range is derived from the highest OI 4 weeks ago] —- See 11/11/12  - Not sure if the $540 range holds. It should but I rolled my $540 monthly credit put spread for $0.00 Dr to a later month and much lower strikes for capital preservation purposes.

11/14/12 (pm) I’ve never seen the highest put OI placed on the right side of the OI “cross”. I have also never seen a fiscal cliff mixed with tax selling either. Guess there is a 1st for everything. I imagine $520 will become the highest put OI strike by Friday. I said last month I thought AAPL would bottom on either monthly expiry or the day after Apple’s earnings. This was obviously very wrong as a slew of bad news came shortly after including top executives departing. I truly believe AAPL will turn back up after we get this expiry out of the way. As you can see, it is a mess and infested with calls. If you look back at a chart, many times a monthly expiration will bring a turning point in the stock, either up or down. I think this one will be no different. — As a reminder, AAPL along with a few other stocks and ETF’s will be opened up to 5 consecutive weekly option series. In other words, there will be 5 weeks of options available at all times. As the front week expires, a new one will populate on the back-end or week 5.

11/13/12 (pm) - Calls are dominating. This can actually be bullish due to unique circumstances as everyone, including freshman retailers, are writing ATM covered calls.

11/11/12 - Under normal circumstances, having many more ITM puts than calls will help the stock rise into options expiry.  Apple has been under heavy tax selling followed by forced liquidation. Will need to take it one day at a time as circumstances are not exactly normal. Not sure if the $540 range holds. It should but I rolled my $540 monthly credit put spread for $0.00 Dr to a later month and much lower strikes for capital preservation purposes.

10/21/12 - Probabilities not tracked during events.  

10/15/12 (pm) Was saying on Twitter today, “AAPL closing $630-$650 just about wipes out all long options.”

10/13/12 - This is a monthly, positions were best put on 3 weeks ago.

09/18/12 (pm) My commentary in the past few days has been thru Twitter/stocktwits or email. (private/public) A quick overview of my thoughts would look like this: “I think the $700′s will cause AAPL some turbulence, but overall close above them” – “We all know why AAPL is having trouble in the short-term with the $700 strike” and so on. —- Do not be concerned with AAPL seeing weakness into Friday; completely normal. On the flip side, do not be alarmed if AAPL starts to ramp up into Friday. You see; my entire goal is to make people aware of ‘why’ AAPL trades the way it does, nothing more. It doesn’t hurt my feelings one bit if AAPL closes $750 on Friday. In fact, I may hang up the boots as my goal is accomplished :o) — To the point: I expect the $700′s to get worked off come Friday and AAPL to move above $700 into iPhone Friday. Remember, options are NOT Zero Summation. So those unhedged call writers could have locked in gains at anytime or point and went 100% neutral. Doesn’t really matter as this is why Aapl_pain is here, fully curated.

[Side note: Some people said $750 range isn't tradable and too far? That's a complete lie because Aapl_pain's Theta[+] has a $755/$760 Sep call Sprd expiring for $0.31 Cr on Fri or 69% annum gain]

09/09/12 - I moved up the 80% put strike to $630. I used $630 for margin of safety, in case $660 put OI decreases.  

08/23/12 (pm) One thing to keep an eye on as September expiry approaches is the amount of ITM calls. The more ITM calls you have, higher the chance AAPL will see weakness into expiry. Let’s say the OI profile looks like it does today with 3 days to go. If AAPL is $695, it will have a much higher probability of selling off into opex than if AAPL was $630. It will have nothing to do with the fundamentals, but the amount of ITM calls. Again, don’t be alarmed at this point, just keep an eye on it. Another reason I wouldn’t make a huge deal out of it right now, the iPhone event and launch is looming. Depending on the dates of the events the OI may have little effect on AAPL.

08/17/12 (pm) My estimation from last night was way off but the probability ranges held up and that’s all that counts. It is very bullish to see AAPL close up near the highest OI. AAPL was able to absorb any selling pressure calls could throw at it. The dividend last week drew down a ton of ITM calls. Going forward we will have to keep an eye on that trend, now that we have 1 sample down.  

08/16/12 (pm) The $630 puts have about 1K more contracts than the $620′s. I left the arrow on the $620 strike as no reason to play hero for 1 day. If sold the $620 puts, good job and case closed. If AAPL opens up towards $640 tomorrow, it will see selling pressure. I like where AAPL closed today against tomorrows OI. Meaning, I don’t think we see any major movement. (shocker, no movement on a opex day) I estimate AAPL trades in the $630-$640 range tomorrow.

08/12/12 - This is a monthly so positions were best put on 3+ weeks ago. I imagine $600 or $620 strike will become the highest OI for puts. I think $650 will stay the highest for calls. Will get a better idea tomorrow. I moved the 98% call side to $655 just so they weren’t on the same strike. This does not negatively affect anyone. If you sold a $650/$655 call spread, you have a big gain and can close and re-open a $655.

07/22/12 -  Probabilities not tracked due to event.

07/19/12 (pm) Almost forecasted that one to the T. $620 strike is 923 contracts less than the $600 strike. I’m leaving $600-$600 as the 80% range and have no problem marking it as a red cell this week even though gave thoughts on why wouldn’t happen. I’m here to help ease your mind of why certain price actions take place, not to make excuses and say “yeah but…”. I did move the arrow over the $620 strike just to identify a day trade strike or strike I mentioned on Sunday.—And this week is another example of why Aaplpain’s OI/Max Pain is superior to dollar value max pain. Using OI, you can usually forecast changes with a decent degree of accuracy. AKA, one way is tradable, one way isn’t.

07/18/12 (pm) - I’m keeping the scale the same. See how the $600′s keep coming down and stock has been weak? The same exact force is causing both of those things.  My prior notes still stand, but with enough days that pass, those $600′s eventually lose their power. Trouble is, what runs out first, time or call buyers closing? — Overall, my thinking is exactly the same as beginning of week. (notes below)

07/16/12 (pm) - And there we go. $600 puts become the highest OI and AAPL get’s kicked down, while $600 calls come down. Same applies, I think AAPL closes above $600 and $620 becomes highest OI ($650 will be tight race)

07/14/12 -  Comment below still stands. I think the $600 calls will cause some weakness; relative to if options didn’t exist AAPL would have been much higher by now. Since earning is so close, I think AAPL will work thru all the calls and close above $600 this week. I don’t think the calls will be too much of a problem. It really doesn’t matter what happens. If AAPL closes $625 on Friday, great. If AAPL closes $590 on Friday, big deal as you know why it closed $590. The next step would be exploiting the artificial weakness; buying @ $590 and selling it on Mon/Tues @ $620, because that is how it would play out.— This is a monthly, so any spread positions should have been put on a long time ago. Since I use OI, I can’t tighten up the 98% range. If you wanted a tighter or new range as if this was a brand new weekly, I can accommodate that. Using an estimated move calculator and Friday’s IV, the options market is pricing in a range of $582-$628. An equivalent of the 98% range would put this at $565-$646. Remember, these are not using OI in any way. I am simply giving you additional info.—Depending on where AAPL trades on Mon/Tues, I can see the $600 puts becoming the highest OI, and possibly, if enough $600′s close, $620 calls becoming highest.

07/03/12 - Random Info – This is from a week ago in the comment section below (sort by newest 1st) Travis Lewis “With earning so close to July opex, I would think with a few tries, AAPl will be able to get over the $600 strike. At anytime, anyone who holds those short options, can lock in gain/loss and go 100% neutral.” – Stock was in $570′s or $580′s at time.

06/17/12 - No opinion on the $650 strike. I like more in the $675 area. The $675 strike may not have much premium on it as of now, but this expiry is also 5 weeks away.

06/11/12 (pm) Tightened up the range.

06/10/12 - Monthly options have been available for many weeks. The bulk of your monthly positions should have been put on before this week. A month ago, the $495/$500 put spread was going for $1.00+ credit to give you an idea. I say this because you may look at the $500 strike and say, of course it is 98%. If this was a brand new weekly and I was looking at a clean slate with no OI, I would be looking at a $540-$620 range.

05/22/12 - This is a visual. Picture those ‘rollers’, on an assembly line, slippery. When weight is pointed downhill, it tends to stay downhill. This is how I visualize Open Interest. It is rare to see put OI build higher than calls. Knowing the points of interest gives us an advantage. 05/23/12 (pm) Removed mark-ups to clean up. They did their job.

05/21/12 (pm) I want to see a little more trading before I tighten up the put and call range.

05/17/12 (pm) Same note applies. Limited buyers in AAPL again, today. Puts aren’t much of a match for this sell-off. A few bright spots going forward: retailers did not get an allocation to FB, only commercial money did. In true Wall St fashion, FB will be flipped fast to non-commercial money. Some of this newly minted wealth will be put back into AAPL. An additional positive lies with the SPY. The $135 puts will end up ITM creating new wealth for those who hold these contracts. These new millions will need to be put to work. Since the 10 yr is almost at record lows, I doubt the majority flows into treasuries but equities. There are multiple signs pointing to the market correction coming to an end; one of them being the self-fulfilling prophecy that is S&P flat on year (1,275). I’m interested in seeing how tomorrow shakes out. Let’s see what happens and gather more data.

05/16/12 (pm) ** It’s been a while since one of the 98% strikes have come into play. Earnings fell on this options cycle and I got way too aggressive and made a mistake ignoring the $500 puts. There was no money to be made in the $500 puts so I ignored them and brought the range up to $540. The correct move would have been to say the 98% range is $500, there is no bid currently, so we will have to wait to trade a different month. This only affects people selling put spreads. If you did sell a $540 put spread and are nervous about it, you can simply repair it by rolling it out a month or more. You would do this for $0.00 debit or a credit. With all that said, I still think AAPL closes >$540 on Friday.

You had the $550 put OI come down ~5K today. This should have produced buying pressure in the stock, I think it did. The problem is you had zero natural buyers to pass the buying torch to. Puts can only cause so much buying before it runs out. Notice, AAPL flatlined at the $550 area until 1:30 EST, then 1/2 million shares came in to be sold. Puts aren’t going to be able to soak that up, especially when all that buying got used up when AAPL sat at $550 for 4 hours. — AAPL is being used as a source of funds. Mix in total market weakness/Europe, and you can see why it can’t catch a bid. I think the weakness in AAPL is coming to an end, especially once we get past Facebook and monthly expiry.

05/14/12 (pm) I don’t expect anything crazy this week, more of the same. I think once we get past this OpEx and FB IPO, AAPL may get a little relief and drift modestly higher. Will update that statement as we go.

04/29/12 - * $500 is your actual highest put OI at 24.5K. Because that came from earnings and they got left out to dry, I’m going to use the next highest strike for the 80% range. Same with the $600 calls. Since they came from earnings I’m going to use the $650 strike for the 80% range. If you want to use the highest OI strikes at all times no matter what, you know what they are.

04/22/12 - Earnings are on Tuesday. Probabilities are not tracked during events. Probability is greatly reduced during events or high volume. Using the highest open interest strikes will be of little use until the event is over. (Once event over I can narrow down the OI graph so can see it better)

04/19/12(pm) No note tonight, as last nights encompassed most of it. I wouldn’t be shocked by a drop off the open and a ramp towards $600 after that. – Will add more in the AM.

04/18/12(pm) I updated some stats tonight regarding monthly expiry. The past 18 of 21 have closed in the red. So if this month makes 19 of 22, it sure wouldn’t surprise me and I would take advantage of this market inefficiency (I was quoting wrong 20/22 stat). — Monthly expiration can be a different beast than weeklies. The reason for this is, commercial money can accumulate huge positions as monthlies are on the board for long periods of time. Another difference, commercial money will have a ton of purchased option hedges. As a result, and not going into the technicals, weird things can happen on monthly expiration week (gamma/neutral, locking in profits etc). I wanted to throw all that out there to further educate. — The $600 calls came down by over 4,000 in OI today helping in all those large spikes down. This is why I like to stick to the 98% area where it is clean and lacks chaos. Right around this $600 strike is a war zone. Odds say it will have more weakness/stall going into expiry. The biggest thing I want everyone to walk away with is knowing ‘why’ this weakness is occurring. If the weakness never comes or big volume keeps coming in the stock for earnings, great. But if you see the SPY up and AAPL down, it’s not a big deal and only temporary noise. It’s hard to write these at night because so much news comes out pre-market. I will have better outlook in the AM. (Just to follow up Monday trade on the LEAP. I STO $630 & $635 Apr 21 covered calls against them when AAPL popped up today) -AM Brought 98% down to $630 strike

04/17/12 (pm) Look at those puts lose some ‘interest’. Not going to add anything substantial tonight. Using the SPY as our backstop gave us a one up on the competition once again. CNBC/Bloom may say the bond market is smarter than the equities market. I say the options market represents the most sophisticated of them all. If AAPL hits a weak patch sliding into Friday, keep your mind clear. Know the why. —- Post Script: Even after all was said and done, AAPL still gained $4.xx from Friday close to Tuesday close.

04/16/12 (pm) See what I was talking about with all the chatter that was about to come out. This is nothing new. You want the negative rumors to hit so hard and at lightening speed that you are one of the first to take advantage of it. Mix this weakness in with monthly expiry and it becomes a gift, for those who can see it. AAPL is right within the monthly range that the options market foretold 4 weeks ago. My goal is to provide you with the data and let you trade it as you see fit. But tonight, I wanted to let you know what I am doing to possibly give ease. This is for trading only. I have a long term account where I haven’t touched AAPL since ’07. In my weekend video I said I would go all in at $580, I tweeted this AM that changed. I only went in on a 1/2 position today at $580. I personally used Jan’14 90 Delta LEAPS as I will be writing April/May calls against these. For the other 1/2 position, I will be waiting for the $540 strike to come into play, if it never does, then I only have 1/2 position and life moves on. I am using the $540 strike because it is the highest put OI. (Remember how I talk about use them as your buy/sell points) I am also waiting for that low of a price as I want to absolutely steal the stock. If AAPL were to get to $540, I would more than likely go into a rare single leg short dated call or spread to fully exploit this Monthly OpEx sell-off. There is nothing to fear. This is how AAPL used to trade all the time. AAPL is up 43% YTD, how is that scary?

To end; I’m not saying AAPL will go to $540, I’m saying if it does I will put cash to work. At the moment I have myriad April credit put spreads on (<$525) and covered calls/CR spreads (>$650) as these were used to collect income on knowing where AAPL won’t be.

04/08/12 - $650 will become your highest OI. I don’t show the $660 strike but that has an elevated amount of calls on it. I am using that strike for the 98% range.

03/18/12 - Great sign for bulls that all those puts are there. You see how the 4 high OI put strikes are all about the same height. That is caused by spreads. People are using the $540/$550/$560/$580 put spreads in one of those combinations. The downside target is $540 for those put buyers. If AAPL were to get below $560, you’re going to have buying pressure come in. Those put buyers are a bulls best friend.

03/14/12 (pm) Once again the stock reaction against the OI was spot on. Monday when $550 couldn’t hold AAPL, that was 1st sign AAPL had strength. Then Tuesday, when all those $550′s closed and it didn’t even phase AAPL was more evidence. And just to solidify it all, today AAPL gobbled up all those $550, $560 calls etc no problem. When the stock starts to overtake the OI, it’s no joke. It means either no buyers or sellers depending on which side it’s on. — $600 is the bears last stand. There is no call OI past that. I think $600 holds, but just watch it at that strike and you will know for sure.

03/13/12 (pm) Bulls are very strong. 32% of the $550 calls closed today and it didn’t even phase AAPL. That is not a bearish sign. I still expect selling to come into the stock later on in the week but this will be very short-lived as it’s from options and will all be over by Friday. Other than that, AAPL looks good. I was expecting AAPL to go range bound for more than just last week but I guess not. Ok by me. Who knows how high AAPL goes due to the allure of its cash. Just let it keep going until shows another short-term top. Last weeks sure didn’t last long. 3/14 am- The 32% of $550 calls closing not causing selling pressure was your sign AAPL has an extreme amount of “no one willing to sell their shares” .

03/12/12 (pm) Apple sure has a lot of strength in it. I keep saying the market is going to have to un-learn this “AAPL always sells off after product launches and earnings” It’s not about that anymore. It’s about getting in-line for that $106B of cash. When value funds buy up the stock, they sit and wait. Value money doesn’t trade. As far as the $550 call OI goes.   If AAPL can power thru that this week. It will prove no one is willing to sell shares (again) and AAPL will be moving much, much higher. I’m interested to see how AAPL trades towards the end of the week and if those $550 calls cause selling or AAPL can absorb it all and power higher.

02/19/12 - I have ‘my take’ in red. I’d rather play the $430 strike put or move up to $445/$450 for any risk trades. On call side I would use $550.

02/16/12 (pm) I really do not like putting on 2 sets of arrows as it is too cluttered. Since this month was ER and the graph is so messy already, what the heck. As mentioned yesterday and seen today, yesterdays sell-off was driven from options than an actual mass exodus of ‘real’ sellers. Things can change on a dime, but as of today, AAPL still looks good. Don’t be surprised on an opex day we see selling pressure, this is perfectly normal. It would actually be very unique if you see strength. If you see strength on an options expiry, oh boy, not a good sign for bears. Out of the past 19 monthly expiry’s, 16 have closed red or 84.2%. As for the 2 sets of arrows, I would approach the day something like this: Say AAPL runs up to $510 area, look for how it acts there, if weak then odds are it will make its way down from $510. If AAPL heads down to $490, watch for strength there. If present, odds are it makes its way up. If opens up at $500 and straddles that, wait a few hours and watch the put/call volume. If they are the highest on both, then odds are it will get pegged to $500. I’ll leave the strategies up to you.

02/15/12 (pm) Todays twitter feed — 8:15am – do you expect a red OPEX Friday for $AAPL? —- (me) I would side with yes, just because of how many calls need to close is all—- 9:27 am sell-off starts – 9:29 am Cause so many calls have to close over next 2 days, keep eye on that. If you don’t have enough buyers to pick it up, stock will come down — 9:50 am  That’s options induced selling, for long termers, no big deal. For traders, options will keep giving sell-pressure into opex —End twitter

My mission has never been to give exact trades but a reason for ‘why’ things happen. I will continue this path. Todays sell off was caused by the options market; case closed. For long-term investors, nothing is wrong with AAPL. This weakness is a blip. For traders, we need to see more. Remember how AAPL kept going to the highest call OI every chance it had? What happened today? That changed. The call OI expanded bigger than AAPL’s stomach so to speak.

I would not call this a full on reversal or sentiment change yet as we have not gone to the put OI. A true directional shift, will go test the put side and break right thru it. The same formula will repeat, AAPL will keep breaking it until the stock finds a bottom. Nothing shows this yet. We are right under the $500 call OI, not a big deal. This is 100% normal for AAPL in a monthly expiry. Everything is noise unless we go down to the $480 level and you find zero buyers. Then you have a problem. I leave the actual trading up to you and supply the data. As of right now AAPL is right where the options market wanted it, $480-$500. If you are a trader, maybe stay neutral as those are your 2 levels. Over $500 means AAPL is bullish.Breaking $480 is bearish, meaning no sign of buyers. If your a trader —  neutral is the place to be. If your a dip buyer, sell a <$480 put as your entry or just wait it out. Overall, how AAPL reacts at certain strikes will give you the answers.

Conclusion: Long term’ers, any selling is a gift. Traders: AAPL OI expanded too much as shown when AAPL was unable to take it out today. That was your sign of a ‘weekly top’.  Look for strength or weakness at high OI strikes. $480 puts should always be able to contain AAPL, if it can’t, you have limited buyers. $500 calls should always be able to contain AAPL, if it can’t, you have limited sellers. I could go on for hours but running out of space. Todays volume was not as it seemed either. Most of that was deltas from options. (since the 80%-98% are not true prob, I put one on the $500 and one on $520) – (added 2 sets arrows for those evil knievel types)

02/13/12 (pm) Not much to add, just keep watching AAPL up against that $500 strike. If can pull away from it, zero sellers exist in AAPL. If $500 causes selling pressure (anytime this week) it would be the options market causing this. I wouldn’t be concerned with this as we have seen it a thousand times over. If it’s something more, I’ll chime in.

02/12/12 (pm) Even though the highest put OI is $400, you can still use other strikes in its place depending on your strategy. I want you to be aware is all. I still wouldn’t make any risk trades on the call side. Watch AAPL at that $500 level to give you clues on how strong buyers are.

02/08/12 (pm) I wanted to clean this up a little so I don’t show the actual highest put OI. Again, this month was earnings and all the volume these days trades on the weeklies. The strikes are not acting like they have in the past. They used to ‘realign’ themselves. This is something new to me  as weeklies have gained so much in popularity. My probabilities are based on the highest OI, not #3, #4 etc. As of right now $400 put and $450 call are highest. Obviously these do not represent the current stock. Let’s see once this becomes a weekly, if the strikes rapidly change to give us a better picture. I figure it would still be nice to have a visual of the OI so I cleaned it up and put arrows at high OI strikes. *****These are not actual 80%-98% probablilites. It is to be used as a visual aide and areas of interest.

02/07/12 - I’m trying to do too much with this OI graph. Earnings has made this thing a mess. We need to wait until this becomes a weekly to get a good picture. I changed my ‘green’ $475′ to black as I just don’t know. If you made risk trades on this strike, feel free to email me your questions. If you’re using for a sell point, then it is yet to come. If you used for covered calls., congrats on the gains.

01/29/12 - Because earnings was this month the OI is messy due to all the speculation. I put the arrows on the strikes which have high OI and have been gaining interest since earnings.

01/21/12 - Earnings is this week. Event probabilities are not tracked. I do not recommend using the highest OI for risk trades. You can use them as very light guides but I would not give much weight to them. During an event anything can happen. High probability trading is removed during an event, therefore we remove our risk trades as well.

01/19/12 (pm) In the AM I was sorry to tweet out, “I think that’s all she wrote” for this week. $430 call interest is just proving to be too much. It’s extremely difficult for me to write my thoughts on next days trading without seeing any overnight/pre market activity. So at times, I may change opinion from evening to next days open. — I will update in AM and leave you with, I think AAPL closes $425-$430 as of tonight. AM- Not much to add. This opex is atypical as it’s an old LEAP expiring. So I can’t see crystal clear what the close will be. Like I said last night $425-$430 or if fine tune it $425. But,I can also see closing $420-$425 because there are not all that many $425 puts, and if they close it will leave the door open for all that selling pressure caused by calls. Sorry don’t have the foresight this time around.

01/18/12 (pm) Well, we made it to $430, now we have to “go from there” as mentioned last night. You’re going to find out just how strong buyers are tomorrow. If you look at the JAJO graph you can see $430 is highest over there and $440 over here. So AAPL will get caught in the middle if can make above $430. I will come back and update this comment in AM. Overall, if can make it to $432+ then you have enough buyers in AAPL to keep moving higher. If can’t make it over $430, options selling too strong. Don’t worry, it’s all options related and Monday will resume higher.-AM Well, $430 looks to be holding AAPL back. Don’t read too much into but the usual options holding AAPL down.

01/17/12 (pm) If you go over to the JAJO graph, $430 strike will be our 1st test. Let’s see how AAPL reacts against that strike — if it gets there. Keep an eye on the SPY graph, as you witnessed today, when SPY hit the highest call OI it was rejected and dragged AAPL down with it. One thing we can watch for is; if the SPY has a hard time with $130, then AAPL will have a hard time right here ($420-$425). If the SPY can blow thru $130, then look for AAPL to go hit $430. Watch how reacts against $430 and go from there.

01/11/12 - Expanded the graph out so you could see the $440 strike start to build up. Removed the arrow from the $400 strike as we pointed out 6 weeks ago that those calls were irrelevant as JAJO superseded. This monthly will be the weekly — next week. The $440 is now your upside target. Again, that is the strike AAPL CAN get to, not will get to. But at least a clean path exists.

01/06/12 – Have been using JAJO to see this move higher.

01/05/12 (pm) Good news. The $380 put OI built up even more and the $400 calls came down. Good sign.

12/16/11 – I thought AAPL would make its way towards $385 yesterday, guess not. You had 40K volume on the $380 strike for both puts and calls, holding it to that strike. If that’s the case again today, expect more of the same. Options get tough to say whats really going on beneath the surface. Realize this is not true trading in AAPL. These are not real prices. These are temporary mispricings caused by options. Hang tight and we will move higher into earnings. When you know AAPL is selling off due to option related reasons (or source funds) and nothing more, it makes it a great time to pick up shares when they are mispriced. (making a general statement for future use)

12/14/11 pm – Commodities take very little money to buy. You can buy $100,000 worth of oil as an example for ~$7,560. When oil, gold etc drop by 5.5%, this is not normal. You need to raise cash to cover this margin position. AAPL is routinely used as a source of funds. Mix our every lasting EU concerns — this is why AAPL takes such a hit. Nothing is wrong with AAPL itself. I changed the range to reflect current. This is why a lot of people don’t hold until opex. Crazy things always happen. Many people close out or roll out as you would have had a gain at some point in time. If you use the OI for buy and sell points, the change really doesn’t matter much. There just seems to be no buyers and all selling volume. I still believe opex will be $380 or greater. I can’t wait for the EU headlines to subside. For anyone new — no – the ranges do not change this much nor does AAPL move $20 in 2 days. The recent times are not normal.

12/13/11 pm – I put the arrow on the $400 strike and took it off the $420 because of how many contracts the $400 strike gained. Note; for now I’m showing the 98% range using the $420 strike. I want to see another trading day or at least the open to see how stock reacts. As of now the $400 looks impossible to get over, but thats why we have 2 ranges to choose from.

12/12/11 pm  - $390 – $400 is your actual highest OI. My arrows have been pretty steady and where the safe/conservative risk trades reside. If they alter from your thinking, I’m using 98% probability is all.

12/08/11 pm – There you go, about 9K $420 calls were added today. That’s a good sign. Using the highest OI probability range we now move up to $420 as your top — statistically. Your still going to have a major test at $400 though. If we break $400, right to new highs. This is a good time to use a real world example of anticipating a strike change. I recently sold $420 covered calls for the portfolio model. I saw $420 OI have a slight build and if there was a higher strike that would gather steam, it would be this one. Once you do this long enough you can anticipate strike changes, if they never happen, big deal. Being prepared will always keep you 1 step ahead.

12/06/11 pm – See Weekly comment. Same applies. I have the $400 in black as I’m in wait and see mode for the $400 strike. Green = I think holds, red = won’t hold and black = unsure, waiting.

11/24/11 – Because $400 calls are so much higher I changed the probability ranges to reflect $400. Right now you want the call OI to come in low as possible so when aapl runs it will leave it far behind. If your selling covered calls feel free use $400 strike or lower, if credit call spreads or the like I would eye the $420+ strike.

11/23/11 – See comment on weekly. It’s great the call strikes are coming in, lower the better. If your playing the call side I would only do it with covered calls.

11/21/11 – See my comment on Weekly. This is good news you have $400 calls gaining traction. Keep reeling them in. You need aapl to get above the highest call OI somehow, someway. This is how you do it.

11/20/11 – Now we are getting somewhere with puts, they are higher than calls, just wish there was less of them(calls). My arrows aren’t on the exact highest OI, when you have a strike thats is very close I default to the safer strike. Depending on your strategy you may want to use the $400 and not the $420 for call side. I just wanted to explain why my arrow’s are there.

11/24/11 – Because $400 calls are so much higher I changed the probability ranges to reflect $400. Right now you want the call OI to come in low as possible so when aapl runs it will leave it far behind. If your selling covered calls feel free use $400 strike or lower, if credit call spreads or the like I would eye the $420+ strike.

11/23/11 – See comment on weekly. It’s great the call strikes are coming in, lower the better. If your playing the call side I would only do it with covered calls.

11/21/11 – See my comment on Weekly. This is good news you have $400 calls gaining traction. Keep reeling them in. You need aapl to get above the highest call OI somehow, someway. This is how you do it.

11/20/11 – Now we are getting somewhere with puts, they are higher than calls, just wish there was less of them(calls). My arrows aren’t on the exact highest OI, when you have a strike thats is very close I default to the safer strike. Depending on your strategy you may want to use the $400 and not the $420 for call side. I just wanted to explain why my arrow’s are there.

1/17/11 – Ever since last Thursday when production rumor came out the stock has been a mess causing the Put OI to break and vary greatly. I will explain in video this week. I thought the $370 put OI would be a 1 day thing, guess not. I have to put up the actual highest OI ranges. I think in reality the ranges can be narrowed. I will put up what I think the ranges are (due to unique week)

11/16/11 – I have so much more insight to this option game than I can quickly get out to the public or even nightly. I’m leaving the ranges at previous level as I think it will shift back. ….To be continued in AM….6:45am – The arrow on the $395 strike will cause some stalling but isn’t one of those strikes that will be impossible to get over.

11/15/11 – Look at my post on Aapl Pain/Weekly. It’s starting. When you have 40K Put OI collapse in a matter of 2 days, yeah, that should spark a buying frenzy. It didn’t. You have no buyers in AAPL. Just one of those things. Until you see people stop buying calls, I’d just step away and let all this noise play out. (again, on weekly page, your going to see the put OI stop going lower and calls close down on it) This is a call sellers dream right now. Lower your cost basis of your long shares. Take advantage of the market taking advantage of your friends 401(k)’s. In the future when you see a bias set in like the calls this time around. Turn the table. Beat them at their own game.

11/14/11 – I changed my take on the put side holding. Last week all it took was 1 news story and now AAPL is out of favor. It seems you just have no buyers. The puts will cause buying but if it’s met with overwhelming selling volume not much it’s going to do. As far as Wall St is concerned Calls are #1 to protect and puts are secondary. Just wait and watch the price action day to day for now.

11/13/11 – See how about 8K each of the $395 & $400 puts closed up Friday , you can bet thats what caused the rally from $380 to $388 on Friday. Thats what we need to see this week without the negative headlines so that buying started from puts closing can be handed off to real buyers/short covering. Under a normal or quiet market I would say $395+ close.

11/11/11 – Monthlies are different beast than the weeklies. I still think we come back up to $395+ area.

11/09/11 – The middle arrow and comment is just showing why I chose to sell the $420 covered call in my portfolio model account #1. That elevated call OI would be a stalling point if got there so thats why I chose $420.

10/24/11 – Since this is 1st day Nov is front month I’d let a few days go and see if that put OI changes up a little.