Quick Squawk: How I am playing AAPL and TSLA Splits
Added 2020-08-12 13:24:04 +0000 UTCTeam, I am at work over the next few days and may not have time to make a complete post until the weekend regarding the TSLA and AAPL stock splits. Therefore, I am kicking out this quick post now to give you the alert on how I am playing these before the end of the trading week.
AAPL will do 1 1:4 stock split for all shareholders on record as of 24 August. The stock will split on that day, although you won't see the new shares in your portfolio until the payment date of 31 August.
My play: I am buying 1x ATM Call LEAPS expiring Sep 2022 because I expect the stock price to rise after the split. I will buy another LEAPS if the stock falls further. Any LEAPS purchased before the split will convert into split-adjusted LEAPS representing 400 post-split shares. If AAPL does not drop between now and the split, I will almost certainly buy at least 2x more LEAPS post-split.
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TSLA will do a 1:5 stock split for shareholders on record as of 21 August. The new shares will be delivered on 28 August and begin trading on 31 August.
My play: I am about to buy 20 shares of TSLA today so that I will own 100 shares after the split in order to wheel. I am not confident enough in more upside to be willing to buy a LEAPS now. I think TSLA is overvalued, but I expect it to stay overvalued. Therefore, buying 20 shares now so I can wheel post-split is the right play for my risk tolerance.
I will do a more comprehensive post on splits over the weekend. This post is just here to get the critical information out quickly.
