/Trade Update $QQQ Closing Dec31st Quarterly Put Spread for 4c Loss

Trade Update $QQQ Closing Dec31st Quarterly Put Spread for 4c Loss

TradeUpdateDec27th,2012?

Withthemarketdownonacombinationofyearendselling,weakerthanexpectedholidaysalesandfiscalcliffshenanigans,Imgoingtotakethechancetogetoutofthistradeforbasicallyeven。

ThetimingwasalittleoffinthisasIputitonearlyandwatchedthemarketcreephigherupuntilthelastfewdays。

Istillthinktheresapossibilitythatthemarkethassomebaddaysintothe31stbutpeopleIknowthatarealwaysbullisharenowpanickinglybearishoverthisFiscalCliffthing,somethingwethinkcouldbemorehypethatanything。

SincewehaveatonofJanuarybearishplaysIdontwanttotaketheriskofacliffdealsendingthemarkethigherforadayortwo。

IfthiswasmyonlypositionIdprobablyjustletitride。

Action:SoldtoCloseQQQDec31stQuarterly64/62PutSpreadat。

51

-soldtoclose1Dec31st64putat。

63

-boughttoclose1Dec31st62putfor。

12

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OriginalPostDec7th,2012?

NewTrade$QQQWhatHappenstotheRestofTechifAAPLBreaksBelow$500byYearEnd?

TheeuphoriaaroundAAPLsstockhasclearlybroken,therosecoloredglassesthatsomanyinvestorsandanalystshavewornforsolong,nolongerofferthesameorgasmichue?

Institutionalinvestorshavebeenhiptothisformonthsnow,asthesellingbythesmartmoneystartedontheverydaythatAAPLlaunchedtheiriPhoneonSept。

21st?

Whilethatallsoundsabitsnarky,Idontforasecondmeanto?

denigrate?

thecompanyandtheirproducts,inthelast2monthsIhavebought2iPhones5sand4iPadMinis,andIcouldntbehappierwiththem。

Theyarebestinshow,fornow?

IamnotgoingtousethisposttogothroughtheissuesthatIbelievefaceAAPLasacompanyandasastockinthe?

intermediate?

term(Ithinktherearemany,nonelessimportantthanthemargin?

compression?

and2?

consecutive?

earningsmisses,ortherecentreleaseoftheabovementionedproductsthatI?

believe?

tobepurelyevolutionary,ratherthan?

revolutionaryashadbeen?

customary?

duringthestockshistoric10yrrun),butIwanttousethisspacetotalkaboutwhyIthinkthestockcanmakeanewlowbelow$500inthecomingdays/weekspriortoyearendandofferalowerriskwaytoplay。

Firstandforemost,justasthestockovershotontheupsideitisverylikelytodosoonthedownsideforreasonsthatdontexactlymakefundamentalsense。

Everyoneontheplanetknowstheyhave$120billionincashontheirbalancesheet,generatetonsonaquarterlybasis,offersa2%dividend?

yield,tradebelowamarketmultiplefor?

double?

digitearningsgrowth,etc,etc。

Andthatsallgreat。

Thosewereallthe?

reasons?

thestockwentupforyears,andtheycanallstillbeintactonthewaydown。

Thiscomesdowntoacouplesimplefacts,investors(both?

institutional?

andretailalike)stillhavetoomuchconcentrationinthename,andthestocksgainshavemaskedalotofunder-performanceinotherareas?

Investorsneedtolockinprofitsespeciallyastheyconsiderhighercapitalgainstaxesgoingforward。

Soasthenewsmediaandinvestorsandaboutanyoneona?

street?

cornerorwatercoolerthisweekaretryingtofigureoutwhythestockisdown25%fromthehighsand8%thisweekalone,itsobvioustousthatitsbecausethefeverhasbroken。

TheAAPLbubbleispoppingandthestockcouldverylikelymakeanewlowsoon。

MYTRADINGVIEW?

IdontwanttopressAAPLhereontheshortsideforanewlowbecausetherearefewcheapwaystodoitandthelowcouldbetoughtogetouton。

WithdefinedriskonecouldsellaJanCallSpread,butgiventhestocksrecentrallyfromtheNov16thlowsof$505toabout$595,Illpass。

ButIdothinkadecentwaytoplayisthroughQQQoptions?

WhileAAPLmakesup17%oftheQQQ,thetop8holdings,alllargecaptech(MSFT?

7。

5%,GOOG6%,ORCL5%,AMZN3。

8%,QCOM3。

6%,CSCO3。

5%,INTC3。

4%)makeupabout55%oftheentireindex?

Whilemanyoftheaboveunder-performtheNasdaq,AMZNandORCLstill?

massively?

out-performytdandmaybejustmaybeinvestorslookattheirgainsinafewoftheaboveintoyearendwithasimilarbitof?

skepticism?

astheyhavewithAAPL。

Whileacompromiseonthefiscalcliffcouldcauseatemporaryshortsqueeze,Ithinkthereisagoodchancethatthatsqueezeisalreadyhappeningandresolutionwillbeasellthenewsmoment。

VolSnapshot?

OurpreferenceforusingQQQoptionsasopposedtoAAPLoptionscomesdowntothesimplefactthatAAPLoptionslookexpensive,andQQQoptionslookmuchcheaperonarelativebasis?