AAPL is up almost 7% today, up $36+, trading near $563.
You might say, “Dan I missed this move”!” “Dan, I even told my neighbor at the mailbox we would start going up in AAPL”! The stock was down 25% or $170 in about 2 months! Should a rebound be a shocker? No, but 7% in one day? What strategy can I employ that would let me play a $600 stock rather cheaply to the upside, but not rip my face off if we go back down?
Strategy and trade idea:
Bullish Butterfly in December Weeklies with about 18 days to go.
Buy 1 December 570 call
Sell 2 December 580 calls
Buy 1 December 590 call These are December 7th Weekly options
A total debit per 1-2-1 spread of $0.95 ($95). example excludes commission
In 9 days if AAPL is between $560 and $600, the yield could be between 20% and 50%.
Again, the maximum risk is what you pay for the butterfly, in this case $95.
Have a great Turkey week!