New Apple Options Unveiled: Strategy Insights for Investors

Investors in Apple Inc (Symbol: AAPL) can explore new options available today for the April 25th expiration. According to Stock Options Channel, their YieldBoost formula has parsed the AAPL options chain and highlighted one put and one call contract of particular interest.

Put Option Analysis

The put contract at the $235.00 strike price currently has a bid of $7.45. By selling-to-open this put contract, an investor agrees to purchase the stock at $235.00 while collecting the premium. Consequently, this brings the cost basis of the shares to $227.55, not including broker commissions. For investors already considering acquiring AAPL shares, this could be an attractive alternative to the current market price of $237.00 per share.

This $235.00 strike represents approximately a 1% discount to the current trading price, categorizing it as out-of-the-money by that percentage. Current analytical metrics, including “greeks,” suggest a 56% probability that the put contract could expire worthless. Stock Options Channel will monitor these odds over time and publish a chart detailing changes on their website under the contract detail page. Should this contract expire worthless, the premium would yield a return of 3.17% on the cash commitment, or an annualized 23.16%. This is what YieldBoost refers to.

Below is a chart displaying the trailing twelve-month trading history for Apple Inc, with the $235.00 strike highlighted in green:

Call Option Review

Shifting focus to the call side of the options chain, there is a call contract at the $240.00 strike price with a current bid of $8.00. If an investor buys AAPL shares at the existing price of $237.00 and sells-to-open this call contract as a “covered call,” they commit to selling the stock at $240.00. Including the premium, this generates a total return (excluding any dividends) of 4.64% if the stock is called away upon the April 25th expiration, not counting broker commissions. However, potential significant upside could be forfeited if AAPL shares rise substantially. Thus, reviewing both the twelve-month trading history and the company’s fundamentals is essential.

Below is a chart of AAPL’s trailing twelve-month trading history, with the $240.00 strike emphasized in red:

The $240.00 strike represents approximately a 1% premium to the current trading price. Therefore, there is a chance that the covered call contract could also expire worthless, allowing the investor to retain both the shares and the premium collected. Current analysis indicates a 52% probability of this outcome. As with the put, Stock Options Channel will track these odds and present a chart of the evolving data (including the trading history of the option contract) on their website. Should the covered call expire worthless, the premium would enhance the investor’s return by 3.38%, or 24.66% annualized, also referred to as YieldBoost.

The implied volatility for the put contract stands at 27%, while the call’s implied volatility is at 28%. Meanwhile, the calculated trailing twelve-month volatility, based on the last 250 trading days as well as today’s price at $237.00, is approximately 24%. For more informative put and call options, visit StockOptionsChannel.com.

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Also see:

• Funds Holding PLAB
• TRHC Videos
• EQM Options Chain

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.