After an ugly gap down on earnings, AAPL has collapsed further down into key support levels:
The stock is 10% down from it’s 50 day moving average… the “low” in terms of a stretch tends to be 15%.
My bet here is that the stock is going to test and possibly break these levels, but the breakdown will also fail and we’ll see a squeeze between now and then.
Here’s the trade:
Sell to Open AAPL Jun 85 Put
Buy to Open AAPL Jun 80 Put
Net credit: 0.62