Sold Another LEAPS for a Big Profit

On 8/14, 10 days ago, I bought 5 contracts of the Apple 1/15/21 $460 Calls. I’m in a few Apple positions getting ready for the split, this is my biggest position.

I decided to sell this position today. I plan on getting back in before the split, so why did I sell it today?

First of all, I had a very nice profit, and this is what I’m in this game for, PROFIT!

The main reason I sold is I feel Apple could be heading into a Pre-Split Ducktail. If you read my recent post, “LEAPS and Stock Splits” you saw my 5, enter or exit, spots with stocks involved in a split. The 4th listed is a Pre-Split Ducktail. This happens 2-5 days before the split. The split is after the close this Friday. We are in perfect position for the Pre-Split Ducktail.

So, what is a Pre-Split Ducktail?

This is a short term pull back after a stock has had a huge run-up after a split announcement. As I write, Tesla is down $72. This looks like a Pre-Split Ducktail to me. Also as I write, Apple is up $1 after being up $15. It looks to me like Apple is fighting it off, but I feel by the end of the day Apple will be down.

If not, no problem! I just locked in $15,100. If it does pull back I’ll jump back into a 5 contract position for the split. Apple will be trading at the split adjusted price next Monday. Monday or Tuesday I plan on being out of all my Apple and Tesla positions.

8/14/20 – Buy to Open 5 AAPL 1/15/21 $460.00 C @ $43.80

8/24/20 – Sell to Close 5 AAPL 1/15/21 $460.00 C @ $74.00

Profit $15,100

This is another huge profit involving my split strategy with Apple. And it’s another great example of the power of LEAPS. I’m in this position for 10 days and I made $15,100. Its a ROI of 69%. This is fantastic!

Successful trading,

Steve

The Options Coach