Using the 646.94 rally target shown, let’s try to lay in some September 650-August 650 calendar spreads, paying $5.00 apiece for four of them. This spread was do-able Friday if you paid the offer for the Seps (13.00) and sold the Auggies for a tad more than the bid (7.90). We may be able to improve on the price by legging into the spread. This would entail buying the Seps when the stock is trading down near a minor correction target, or alternatively, shorting the Auggies when Apple is hitting a minor rally target. But for now, just to get a feel for these calls, we’ll work this gambit as a spread order. _______ UPDATE (July 20, 2:48 a.m. EDT): With the stock moving higher, the spread has widened and is now trading for around 6.20. We can do better, but it looks like it will require some work. Stay tuned for a trading signal, presumably at a swing high or low that will allow us to leg into the spread. The latter is what we’ll probably use, since shorting the Auggies at a minor rally top would leave us naked short calls. Risk could be very tightly controlled nonetheless, but margin requirements would be exorbitant.
