Previously, on this blog, I told you to buy Coach May $50 call options before they reported earnings. Again, this is my secret stock replacement strategy. Well, I am happy to announce Coach blew out earnings this morning and the stock is up more than 12% already today. If you bought the May $50 Coach call options, you are up 200% today alone. And the options I talked about more than a week ago here at the bilionairesportfolio.com, those options are up 410%.
Now, I tell you this not to gloat, but to show you the power of information and great chart set ups. Here is how I developed this trade idea:
1) I tap into my network of contacts and did my research on some of the world’s best billionaire hedge funds. The latter is the most important step, and the basis of my service The Billionaires Portfolio.
2) After my initial due diligence, I look for great chart patterns. Remember from my previous blog post on Coach, I told you that I do a chart review every day to look for great trading setups. And I told you that I had found an unbelievable chart on Coach.
If you want to learn how to find these great trading setups and make some money along the way check out my website and service at billionairesportfolio.com.
Now, on to everyone’s favorite stock Apple ($AAPL) …
This is the same stock I have been telling you for the last two months to SELL! And I was dead right! Apple has declined by more than 20%, wiping out most of the day traders and option traders in this stock.
Here is a secret that most of you wont believe: I actually like Apple.
I use Apple products and I like the stock, but guess what … I hate the options. Why? Because the number one rule in options trading is this: Only buy cheap options.
And Apple’s options are always expensive. The volatility is always pumped up. So guess what? Even if your right about Apple, and you buy Apple call options, and Apple beats earnings, you still won’t make much if any money. Again, because the options are just too expensive. That is the secret/the tip you need to learn.
Apple’s options are too popular, too expensive even if you know the stock is going up or down. Trust me. Stay away from Apple options.
Now, on to Apple’s earnings …
I DO think Apple will beat earning expectations today. And Apple will also increase its dividend.
This should give the stock a nice one to three day pop of 10% or more. If this occurs, and only if this occurs, would I be a buyer of its stock, but not its options.
So in summary: Apple will beat earnings, will increase its dividend, and the stock will move up by more than 10% or more. If it does, Apple is a buy! And please don’t get burned trading Apple’s options. Just buy the stock instead.
Editor of the Billionaires Portfolio