Vol Buy In AAPL

[Steven Place]

Here’s a 1 year chart of AAPL with some volatility studies:

This is the lowest volatility the stock has seen in a while. A lot of energy is pent up and I’m expecting a move soon.

But let’s be smart about it and scale in.

Buy to open AAPL Apr 530 straddle for 21.25

Add at 19.50

If that’s too much for you, use the AAPL mini options.

We’re looking for a move to either 550 or 510. when it gets there we will adjust the trade.

[Steven Place]

AAPL has rallied up to 548, I’m going to consider this “close enough” to hedge off some of our gamma.

Here’s what to do.

You already have the AAPL 530 straddle on.

So first:

Sell to open Apr 560 Call for 3.90 or higher. (This call sale effectively spreads the 530 call we already have on)

Next:

Sell to open Apr 560/570 call spread (This reduces our delta even further.

Here’s our new risk profile:

If AAPL reverts then we will close out of these trades.

[Steven Place]

Going to close this out. We got the volatility but it kind of pivoted around that 530 area. If AAPL bounces here then we could be at a much larger loss.

Here’s how to close out the trade:

1. Sell to close Apr 530 Put
2. Sellt o close Apr 530/560 call spread
3. Let the 560/570 expire worthless

[Author]

Posts