Faangshort
026. PIGGISH PLAY - Short Apple Inc. (AAPL)I think this Microsoft earnings report is going to be pretty important because of how it's past reports have affected the FAANG gang in 2020. Specifically, the report announced in Q3 2020 started a pretty nasty sequence of tech selloffs that week. It's tough going first, but it is much tougher going second if the lead off is shaky. This is the reason why Nividia can occasionally receive the cold shoulder as the last in the lineup.
If I were Apple's C-X-O right now, I would be praying for the most outstanding quarter in firm history. Anything short of that will likely lead to mass selling, if Microsoft is to start the popping-of-the-bubble tomorrow night. And let's be realistic here - the current tech stock environment is far from anything resembling fair value. If it were not an apparent safe haven, Apple would likely be trading closer to 100/share right now, given its imperfect report two quarters ago.
Therefore, I'd like to take advantage of this domino-effect by buying AAPL puts - and lots of them.
And guess what?
It's possible because they imply very low volatility compared to what is very likely going to occur over the next few swings. This is the key to this trade idea - MSFT's contracts are a much fairer deal in terms of premium to likely-reality-IV. Apple's are not.
PIG SPECS:
AAPL PUTS:
-STRIKE: 137/share
-EXPIRATION: February 5th, 2021
Recommend selling pretty soon after price enters the profit zone stated in the chart. The real value is mostly captured on the greater-than-average move down itself, rather than the specific number of points beyond the money.
- ApPig Inc.
NASDAQ:AAPL
NASDAQ:MSFT
TVC:NDX
TVC:SPX
AMEX:FNGS
FAANGs (Daily) SELL; Massive SHORT, good for a -33% drop!It's done! Put a fork in it. - Much like the last time... :-) - See attached post.
