I'm always excited to by AAPL and they've settled into a bit of a range - for now:
That’s a $16 range it’s in at the moment so the trick would be to pick up bullish legs at the bottom and bearish legs at the top, right? If we zoom out to daily, it’s more or less the same range since July.
Now it’s doing a Triangle Squeezy Thingy (see any basic TA book for details) so be very careful if it breaks out of that range – as it could make a violent move. Next earnings are around Nov 1st. That big red stick on Friday is not a positive sign but, then again, we had one in June – right before a big rally.
AAPL is very volatile and, at the moment, I’d go with:
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- Sell 5 AAPL 2027 $195 puts for $15 ($7,500)
- Buy 15 AAPL 2027 $210 calls for $50 ($75,000)
- Sell 10 AAPL 2027 $250 calls for $30 ($30,000)
- Sell 7 AAPL Jan $225 calls for $14.65 ($10,255)
That’s net $27,245 on the $60,000 spread that’s $25,500 in the money and you have 8 more quarters to sell short calls ($80,000) which would put you in for a potential credit of $50,000 with $110,000 (403%) of upside potential against your $27,245 initial investment.
If you are not THRILLED to double down and then double down again – you shouldn’t start with these amounts or this position at all. It’s going to be a wild ride and you have to buy more when it’s low and sell when it’s high along the way and, if you don’t have the discipline or the margin – don’t start!