Sold AAPL Naked Put, Again

I’ve sold Apple (AAPL) options a few times and have an overall profit from my series of trades.  I don’t like taking big risks with it since it is so volatile and try to sell naked puts far out of the money (OTM).  I like trading it due to its volatility too.  That makes the premiums much richer.

This morning, while AAPL was at 175.04, I sold one AAPL August 155 naked put (APVTK) and received $399.25 after commissions.  That’s $20 OTM meaning AAPL would have to fall more than 13% in the next five weeks for me to take a loss on it.  I could see AAPL coming back down to closer to $160-165 based on the chart, but don’t think it’ll drop below $155 (or $151 if I want to think about a break even trade).  It’s holding above its 10 day moving average right now and although it closed below its 20 day moving average yesterday it is back above it today.  To the higher side, $180 could be a near term ceiling with the 50 day moving average hovering around there.  If it moves in that direction pretty soon I’ll have to consider naked calls far out of the money.

A few minutes after my trade, AAPL went down to $174.26 and this option traded as high as 4.30.  20 minutes after that AAPL was up above where it was when my limit hit.  The greatest risk on this trade is that the new iPhone 3G disappoints.  I don’t see that happening based on the buzz I’m hearing around the 23-27 year olds in my office.  I’m not basing my full decision on their enthusiasm, but it helps the case.