AAPL Analysis

Apple Inc. (AAPL)

Update 9/21/2018: I have exited AAPL at $3.92 per contract/share, a small loss. I exited a week before expiration as the share price continually toyed with the lower breakeven level.. The share price was $228.71 at the time I exited.

Shares declined by 4.2% over 16 days, or a -95% annual rate. The options position produced a 0.8% loss for a -17% annual rate.

I have entered a short iron condor on AAPL, using options that trade for the last time 23 days hence, on Sept. 28. The premium is a $3.89 credit and the stock at the time of entry was priced at $228.71.

I made the decision to enter the trade in my account based on high implied volatility relative to the past 52 weeks.

The profit zone for this position is between $238.89 on the upside and $216.39 on the downside.

Implied volatility stands at 14%, which is 1.9 times the VIX, a measure of the volatility of the S&P 500 index.

AAPL’s IV stands higher than 55% of its daily readings over the past year.

The price used for analysis was $228.08.

Premium: $3.89 Expire OTM
AAPL-iron condor Strike Odds Delta
Long 245.00 87.0% 34
Break-even 238.89 77.5% 31
Short 235.00 67.9% 28
Short 222.50 66.4% 31
Break-even 216.39 75.8% 22
Long 212.50 85.1% 13

The premium is 39% of the width of the position’s wings.

The risk/reward ratio is 1.6:1.

The bid/ask spread was 4%.

By Tim Bovee, Portland, Oregon, Sept. 5, 2018


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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