AAPL adjustments for 1/7/08 - 1/10/08

Well we've survived a 30 point sell-off of Apple over the last few days and this is how we did it:

1/07/08 Rolled AAPL

Bought Jan '08 185 at a cost of $4.28.

We add this back to our CB of $56.58. $56.58 + $4.28 = $60.86.

We then sell the the Jan '08 170 for $11.92.

So we subtract the $11.92 from the adj. CB of $60.86 which equals $48.94.

Our new CB for AAPL is $48.94.

If we want to set our stop-loss so that we don't lose any more than 20%, we take $48.94 x .2 which equals $9.78 and subtract this from our CB of $48.94 which equals $39.16.

An easier way to do this is to just take $48.94 x .8 (this shows us what 80% of $48.94 is) which is $39.15. So we go into ThinkorSwim and set our Stop-Loss for $39.15.

1/10/08 Rolled AAPL

I did this one the same way as the one above so I won't explain all the math:

Bought the Jan '08 170 @ 11.45 and sold the Feb '08 170 @ 19.20 for a credit of $7.75

CB is now $41.19

Stop-Loss is $32.95

We've lowered our CB $27.96 since we started this diagonal.