Diving Into the Put Option

Today, investors eyeing Apple Inc (AAPL) discovered intriguing options expiring on November 8th. One put contract at the $220.00 strike price beckons, sporting a current bid of $4.45. Selling this put contract at $220.00, an investor commits to buying AAPL shares at a $220.00 cost basis, offset by the premium to $215.55. For potential buyers of AAPL stock, this offers a compelling avenue compared to today’s share price of $227.24.

Unlocking the Call Option

On the flip side, the call contract at the $230.00 strike price holds allure with a $6.50 bid. By selling this call contract as a “covered call” after purchasing AAPL shares at $227.24, investors commit to selling those shares at $230.00. This strategy could yield a total return of 4.07% if the stock is called away at expiration.

Assessing Risk and Reward

The $220.00 put offers a 2.02% cash-return if it expires worthless, while the $230.00 call could add 2.86% return if the covered call contract lapses fruitless. Analytical odds put the put contract at 67% and the call contract at 53% chance of expiring futile. Implied volatility stands at approximately 26% for both options.

Comparing Volatility Metrics

Real-time volatility for AAPL, utilizing last year’s closing prices and today’s $227.24, stands at 22%. These versatile options indicate a wealth of possibilities for AAPL investors, guiding them in seizing the right opportunities as the November 8th deadline approaches.

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