AAPL Call Calendar (LIVE Closing Trade)

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Call calendar: In this video, we’re going to make a live closing trade here of our Apple calendar spread that we entered into just a couple of days ago. We got into this trade back on 3/24 for Apple. At the time that we’re doing this video, it’s 3/29. It’s only been about five days, but the trade has come into a profit zone where we want to take the trade off and bank a little bit of money.

This trade was originally a call calendar spread and we had tried to take advantage of the possible move up in implied volatility as the stock went closer and closer to its earnings event date just beyond April expiration. Well, at the same time, though, we did want to see a move up in the stock, and we got a pretty good jump here today in Apple stock. It’s up a little over 2% today which has given this thing a little bit of room to make some money.

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With call calendar spreads and all calendar spreads that we entered into, we usually like to take profits at a 25% gain. Once we make 25% on the cost of the original trade, these two calendars that we got into for Apple, we paid 162 for, so a 25% gain would get us out at about 203. And you can see right now, the calendars are trading for 204, 205 right now, real-time, real money, real market.

It gets us out with a little bit of profit, $86, small trade obviously, but a nice little closing trade. We’re going to just right-click on the entire order, go over to closing, and we’re going to enter the order. We’re going to try to get 204 which is just $1 above where we want to get out of this trade in. And you can see we placed the order now, so it’s working. I’m not sure how long it will take to fill.

It’s trading right at the market, so we’re trying to get out for a little bit less than the market is trading at right now. This spread is worth about 204 ½ and we’re looking to get out at 204. This thing should fill pretty quickly. It's about 151 in the afternoon. We’ll pause this video, come back here as soon as this trade fills.

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Alright, we’re back here with our Apple call calendar spread. It's been a couple of minutes, not too long, maybe about 10, 15 minutes or so, and the market seems to be trading now around 203, 202 or so. Just for the sake of getting out of this trade, because we still want to get out of this trade, it’s right near our profit target, we don't have to be stingy within a penny or two, we’re just going to adjust this trade slowly down to 203.

At this point, we've now closed out of the other order; we now have the new order in for 203, again, that’s exactly where the market is. My philosophy on adjusting and filling trades is taking your time with it, don't force the trade in, put an order in, maybe wait 10, 15 minutes or so, watch where the market is trading, see if you can put an order ahead of the market or right at the new price that it’s trading at. And then again, just wait a little bit and wait for that entry price to get hit. Again, we’ll pause this video and see if we can get filled on this trade.

Alright, right I just paused this video, of course, it got filled almost immediately within two seconds after I paused the video. Now, we are out of the Apple call calendar spread at a 203 credit, and that locks us in at the profit that we had. As always, I hope you guys enjoy these videos. If you have any comments or questions, please add them right below. And until next time, happy trading!

About The Author

Kirk Du Plessis

Kirk founded Option Alpha in early 2007 and currently serves as the Head Trader. In 2018, Option Alpha hit the Inc. 500 list at #215 as one of the fastest growing private companies in the US. Formerly an Investment Banker in the Mergers and Acquisitions Group for Deutsche Bank in New York and REIT Analyst for BB&T Capital Markets in Washington D.C., he's a Full-time Options Trader and Real Estate Investor. He's been interviewed on dozens of investing websites/podcasts and he's been seen in Barron’s Magazine, SmartMoney, and various other financial publications. Kirk currently lives in Pennsylvania (USA) with his beautiful wife and three children.