Week Ending 09/28/2012: $667.10 Sept 29, 2012 3:55:37 GMT -5
Post by JDSoCal on Sept 29, 2012 3:55:37 GMT -5
Maximum Pain On Friday for Apple
Posted on September 28, 2012
Apple got busted by the Market Makers who control the options market. There was a huge stack of calls that started near 670 and got higher as you headed towards 700. On the put side, they were at the maximum at 670 and were piled pretty high below 670. Guess what, Apple finished the day right under 670 so all those calls and all those puts expired worthless. Hunreds of millions of dollars in the big pockets of the Casino. That’s what the options market is, a Las Vegas Casino that stacks the odds in it’s favor and rakes off it’s take every Friday as hundreds of millions of dollars are transferred from the hands of the young and foolish to the old and rich. You would think the retail buyers of puts and calls would get a clue. This continues endlessly because the young and foolish are repaced by a whole new batch about every 3 months. It’s just like Las Vegas; there is a constant stream of new players eager to get rich quick.
Apple is the most manipulated stock in the market. They like it in the options market because of the huge volume. There are even HFT’s that trade the weekly options. That’s a scary idea, with the wide margins, the HFT’s can really play tricks on people buying and selling options. I talked about how the big bank trading desks and hedge funds like to use their programmed selling programs to manipulate Apple stock from time to time to run the stock down and run your stops and scare you out of your holdings, before they run it back up again. You combine the stock manipulations with the option manipulations and you just shake your head. As a retail investor, you need to understand when and how Apple stock and options will be manipulated. If you don’t know the rules when you sit down to trade Apple, you will be dinner for someone.
Next week, we have a new month, an ipad mini, maybe an imac refresh and earnings. Even Tim Cook can’t screw that up, can he? The apology was a tactical error from a psychological point of view and a marketing point of view. The cold honest truth would have sufficed. Apple is going head to head with Google and the map scuffle was the 1st round. This will get more intense as we move towards open competition with Google. I’m looking for some kind of run into earnings. At this point we still don’t know how robust it will be. I will talk about that more later this weekend.
Great post, agree with it all except he was a little harsh on Cook. Not that I don't truly believe the people responsible for the maps fiasco shouldn't be waterboarded and flogged - I do. I just think there are some less valuable and more responsible minions than TC who should be taken out for a fishing trip like Fredo (ask Mr. Lovey, Lovey).
Some of the things he says about the call gambling are spot-on, and I won't elaborate, so as not to offend some of our members.
I was busy this PM, so I didn't get to see the final open interest numbers before OCC wipes the ITM's to zero. I e-mailed them to see if I could get them. I'd really like to see those 670 and 675 put numbers.
And yes, Jim Cramer needs a cock-punch. Seriously, I am about as free market and anti-regulation as they come, but what that MFer does should be illegal somehow. Then again, if they made stupid illegal, we'd never have enough prisons.
What I really think about Jim Cramer.
F this week, and yes, bring on the iPad Mini!