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AAPL released the iPad2 today and Steve Jobs even joined the party; his attendance was under speculation due to his recent health issues. The thinner, faster, dual camera device is already receiving rave reviews. The iPad 2 will go in sale March 2 in the US.

Speaking of AAPL, our weekly Iron Condor is going quite well. The stock has recovered lately as anticipated and is hovering around the $350 area. Today's strength on the news announcement was expected The stock backed off into the close which sets our Iron Condor up great going into the final 2 days of its planned existence.

The plan is to allow the put side of the Iron Condor to expire worthless on Friday. A great distance lies between the current stock price and the short put of the put spread. I don't see anything on the horizon to threaten the puts; even with the Middle East tension continuing to escalate.

The call side of the Iron Condor is already very profitable and there is nothing wrong with closing the trade and taking 50% of the original profit expected; it would still be about a 5% return in 6 days! However, in spite of the stock's rise this week, time decay (Theta) has eroded the premium beautifully and will continue to do so over the next 2 days. Even if the stock continues to rise tomorrow and Friday, a nice buffer exists between the short call and the stock price. Bottom line, I feel very confident in holding the position.

I was all set and ready to execute a couple of new positions on Tuesday but the market fooled me...and everybody else. Somebody forgot to turn on the "buy" machines for the typical first-day-of-the-month-buying-frenzy. I responded by staying out of the market and sitting my hands. No need to chase positions in the current market. The market could move decisively one way or the other right now and it is better to wait than force trades. Remember, sometime the best trade is the one not made.

Stay tuned........Happy trading!

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Posted-In: iron condor options tradingOptions Trading Ideas Best of Benzinga


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Market Foolery & AAPL Strength