Nearly two weeks ago when I made my naked put trade on AAPL for the December $210 naked put, I thought I changed my order that I originally entered, but I didn’t. Apparently, I left the first order in and it hit two days later on December 19. While AAPL was trading at$218.87, I sold one AAPL December $210 naked put for $6.60 and received $659.33 after paying $0.67 in commission. I didn’t even notice the trade during my busy week and saw it last week when I was reviewing all my accounts.
I decided to leave the extra exposure in place since I thought Apple would be one of the safer investments out there. The trouble with a correction is that even good stocks fall too. Today, AAPL is trading closer to $213 and I’m down $767 on paper for the pair of puts. My options are still out of the money, but I can see the losses in my account and that’s never fun, especially when the second order was a mistake. Yesterday, AAPL fell as low as $107.05 intraday before recovering a few bucks by the close.
I’m going to continue to sit on the position for now, but I might buy back one of the contracts in November if we see some strength or at least a flattening that allows me to get out for a profit. I’m still a believer in AAPL, so I might let it run all the way to expiration. The forward PE ratio is down to 15.46, which means we shouldn’t see the trend lower continue too deep. If assigned, I’d have over 40% of my account in a single stock. I don’t like that plan and might change my plan before long if I decide there’s a legitimate reason for the drop in price.