New Apple Options Launch: Exploring Attractive Investment Strategies
Investors in Apple Inc (Symbol: AAPL) gained access to new options today, set to expire on May 9th. At Stock Options Channel, our YieldBoost formula analyzed the AAPL options chain and identified a noteworthy put and call contract.
Put Contract Details
The put contract at the $220.00 strike price is currently offered at a bid of $7.20. If an investor sells to open this put contract, they commit to purchasing the stock at $220.00, while collecting the premium. This brings the effective cost basis for shares down to $212.80 (before broker commissions). Hence, for investors already planning to buy shares of AAPL, this could be an appealing option compared to the current share price of $221.67.
This $220.00 strike price reflects approximately a 1% discount to the present trading price, marking it as out-of-the-money by that percentage. Current analysis indicates a 55% chance that this put contract could expire worthless. Stock Options Channel will monitor these odds over time, providing updates on our website under the contract detail page. If the contract does expire worthless, the premium equates to a 3.27% return on the cash commitment, or an annualized rate of 27.78%—a figure we refer to as the YieldBoost.
Trading History Overview
The chart below displays the trailing twelve-month trading history for Apple Inc, highlighting the position of the $220.00 strike relative to that history:
Call Contract Analysis
Looking at the call options, there is currently a call contract available at the $225.00 strike price with a bid of $6.50. If an investor buys shares of AAPL at the ongoing price of $221.67 and then sells to open this call contract as a “covered call,” they agree to sell the stock at $225.00. Including the premium collected, this would yield a total return of 4.43% if the stock is called away at the May 9th expiration (before broker commissions). It’s important to note that significant gains may be missed if AAPL shares rise substantially, thereby necessitating close monitoring of Apple’s trading history and business fundamentals. Below is a chart outlining the trailing twelve-month trading history for AAPL, with the $225.00 strike marked in red:
The $225.00 strike price indicates roughly a 2% premium over the current trading value, categorizing it as out-of-the-money by the same percentage. There is a possibility that this covered call contract could also expire worthless, allowing the investor to retain their shares and the premium collected. Current analysis suggests a 54% chance of this outcome. Stock Options Channel will continue to track these odds on our website, alongside charts detailing the trading history of the option contract. If the covered call expires worthless, the premium would represent a boost of 2.93% in extra returns for the investor, or 24.89% annualized—another instance of our YieldBoost.
Volatility Summary
The implied volatility for both the put and call contracts hovers around 28%. Conversely, our calculations show the actual trailing twelve-month volatility—factoring in the last 250 trading days and the current price of $221.67—at 24%. For more ideas on put and call options worth exploring, visit StockOptionsChannel.com.
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also see:
- Low Priced Dividend Stocks
- FLIR Options Chain
- Funds Holding AZTA
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
