We still own some AAPL stock at 172.15. Earnings after the close. Picked up some puts on AAPL earlier. AAPL has faded to the 20 day MA ahead of results, leaving it in position to bounce on results. Still, we are considering selling some May $200 strike calls on our stock. The spread is 6.3 x 6.4. The delta is 54 and the 200 day SMA is at 192. An 8 point drop to the 200 day reduces the option by 4.32 plus the volatility decline once earnings is out. Sell for 6.3, buy for 2.1 or so, bank approximately $4.00 per option. If you think AAPL may fall on results -- a possibility given earnings are now not being treated so well, this is a pretty simple play.
Jon Johnson, Chief Market Strategist
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