Russell’s Redux – Revisiting the Weekend Review

The two recommendations from Options Action this weekend revolved around earnings announcements.  There was a bullish call on Goldman Sachs (GS) and bearish one on Apple (AAPL).  Both companies have reported their earnings and the guys on the show appear to be 2 for 2 on these calls.

GS is trading at 104.15 this morning just under 8 points higher than the closing price last Friday.  The recommendation from the show was to sell a GS Nov 80 Put at 2.20 and purchase a Nov 105 Call at 2.20.  This would have been put on as a costless trade, excluding commissions.  Right now the long Nov 105 Call may be sold at 4.85 and the short Nov 80 Put could be covered for a debit of 0.55 for a credit and profit of 4.30 on this trade.

AAPL is trading at 403.00 mid-morning today down almost 20 points from the close last Friday.  The trade recommendation was to buy an AAPL Oct 405 Put at 5.60 and sell and AAPL Oct 390 Put at 2.30 for a net debit of 3.30. The best case scenario is for AAPL to trade down to 390.00 by Friday expiration however at current prices this trade could be exited for a credit of 4.20 and a profit of 0.90.