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I want to add Apple to my Pro portfolio (have none at the moment) but don't have the cash to buy many shares outright. I'm contemplating a synthetic long like Jeff recommended for Ford in a recent MFO dispatch. I'm thinking buy calls and sell puts for January 2016 at, say, %540 strike price. It's all guesswork for this novice options trader. Any feedback would be welcome. Thanks in advance.
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I meant $540 obviously.
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Hi Frantz,

I want to add Apple to my Pro portfolio (have none at the moment) but don't have the cash to buy many shares outright. I'm contemplating a synthetic long like Jeff recommended for Ford in a recent MFO dispatch. I'm thinking buy calls and sell puts for January 2016 at, say, %540 strike price. It's all guesswork for this novice options trader.

I don't know what the correct move is for you, but I trust that you have studied and reviewed the Options U. materials on Synthetic Longs, http://newsletters.fool.com/50/optionsu/synthetic-longs.aspx.... The option contracts each either obligate you or give you the opportunity to own 100 shares. There are also mini-contracts that only obligate you to ten shares per contract.

Before you proceed, make sure that you are comfortable with the concepts and talk with your brokerage and make sure that you know how to trade AAPL7 instead of AAPL. Ask more questions here too!

Regards,

Lon.
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I would just buy whatever amount of shares you can and then add to it as capital becomes available. Doing a synthetic long on AAPL when capital is limited I don't think is a good idea.

Glenn
All the best!
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I am a Apple Bull and I have also benefitted from synthetic longs. But you need to make sure you understand this type of option. You need to be careful about the put side of the transaction. One contract obligates you to buy apple at $54,000 if Apple is below 540 on January 2016. Also, remember this contract can be put to you at anytime between the time you write it and January 2016. So if some black swan hits the market and the stock market and Apple plunges, someone can put apple shares to you at anytime; so you need to be able to meet this committment.

I would not recommend the 540 Syn Long, again because of the put commitment. You can write a 510 Syn Long and still receive a small credit. 

John
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As always with MF Pro, great responses that immediately enlarge my thinking. Thank you all for taking the time.
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