Sold AAPL Naked Puts

Apple, Inc (AAPL) released news that Steve Jobs health concerns are related to a hormone imbalance and that he should recover in a few months.  Assuming that’s true AAPL started to rally.  Actually, it had the biggest lump of it’s rally on Friday, before the news was public.  That’s fishy to me, but not so much to keep me from jumping in to try to get a quick profit.

While AAPL was trading at $94.14 this morning I sold two AAPL January 90 naked puts (QAAMR) for $2.30 each and received $448.50 after commissions.  That leaves me with only two weeks for AAPL to stay above $90.  I’m not hedging these puts yet, although I might buy them back early.  If AAPL drops below $90 I might even be willing to take the assignment and then sell covered calls on my shares since the AAPL premiums are generally high. 

The risk for AAPL remains the slow economy.  I doubt the December retail sales will paint a pretty picture for consumers’ spending, but over the long term AAPL will be fine.  The chart for AAPL shows decent support somewhere in the $85 range.  If that holds on a new dip, I’ll be sitting pretty with 200 shares at a cost under $88 and plenty of room to sell covered calls to bring me back to a profit.  I don’t expect this to be an easy ride, no stocks should be considered easy now, but I do think my chances are better on AAPL than a lot of the others based on the Steve Jobs health news.