Bad Apple Options Investment

19Feb/0811

I've lost 100% of my investment (on paper) in Apple options. It is probably one of the worst investment decisions I've made. I am glad that it is just a paper trade and actually not using my own money to invest. I've bought 30 AAPL FEB ‘08 145 calls @ 1.42 average. On Feb. 15 (option expiration day), the $4260 investment became worthless.

I wouldn't have lost so much money if I had bought the stock instead of options. That's why I think options are more riskier than stocks. Nevertheless, I still believe Apple is a good company and the stock price will go back up because they always have new innovative products on hand. By the looks of it, the stock may be trading sideways for a short period of time.

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Tagged as: apple, expire, innovative, options, risky, worthless Leave a comment

Comments (11) Trackbacks (0) ( subscribe to comments on this post )

Robert Plank
May 8th, 2008 - 18:06

Hey, I lost $30k in REAL dollars buying AAPL Apr 08 $200 calls. I bought a few at $20.00 in December when it was on a pullback to $190 from $200.

Bought more at $10.00 in January thinking it would go back up. Yeah right… $30k loss. At least it’ll help a little bit on my taxes for next year.
CY
May 9th, 2008 - 17:29

Options are much riskier than stocks because they are time-limited, and most options expire worthless because of this. IMO, it is a good idea to buy options right after the earnings because the trend will continue for at least a few days. Buying options before earnings is more or less gambling.

It looks like you bought AAPL near the highest points. I am sorry to hear your loss. However, I don’t think it is Apple’s problem. When you take a look at the overall market, most of the tech stocks are down in the beginning of 2008. Apple starts to pick up recently because of the new 3G iPhone rumour, which is scheduled to be released sometimes in June. Other tech companies also released good earnings reports in the same time, therefore driving the market higher. It will probably pullback a little in the upcoming weeks because of the oil news. Watch carefully for the 3G iPhone release…
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