Apple Inc Options Market: February 28th Contracts Unveiled

Today marks the launch of new options for Apple Inc (Symbol: AAPL), with contracts expiring on February 28th. Stock Options Channel has highlighted an interesting put and call option based on our YieldBoost formula.

Examining the Put Option Strategy

The put option with a strike price of $240.00 has a current bid of $6.65. By selling this put contract, an investor agrees to buy stock at $240.00, while receiving the premium—which effectively lowers the purchase cost to $233.35 (before any broker fees). For those interested in AAPL shares, this option offers a potentially advantageous alternative to the current trading price of $242.59 per share.

This strike price is about a 1% discount from the current trading level, meaning there’s a chance the put contract may expire worthless. Current data suggests a 58% likelihood of this occurring. Stock Options Channel will monitor these odds and present a chart on our website under the contract details. If the contract does expire worthless, the premium collected would yield a 2.77% return on the cash used, equating to an annualized return of 19.83%—a concept we term YieldBoost.

Below is a chart showing Apple Inc’s trading performance over the past twelve months, with the $240.00 strike price marked in green:

Analyzing the Covered Call Opportunity

Now, looking at the call options, the contract with a strike price of $245.00 currently has a bid of $7.55. If an investor buys AAPL shares at the current price of $242.59 and then sells this call contract, they commit to selling at $245.00. When factoring in the premium, this could yield a total return of 4.11% if the shares are called away by February 28th (excluding any dividends or broker fees). However, investors should be mindful that if AAPL shares increase significantly, potential gains could be limited.

As seen in the trailing twelve month trading history, the $245.00 strike price is marked in red:

This strike price represents an approximate 1% premium over the current trading price, suggesting a possibility that the call could also expire worthless. If that happens, investors would retain both their shares and the premium earned. Current analysis indicates a 51% chance of this scenario. Stock Options Channel will also track these probabilities and provide updates on our site, including a historical trading chart for this option. Should the covered call expire unexercised, the premium collected would yield an extra return of 3.11%, or an annualized rate of 22.27%, which we again refer to as the YieldBoost.

The implied volatility for the put option stands at 24%, while the call option shows an implied volatility of 23%. Meanwhile, the trailing twelve month volatility—calculated using the last 251 trading days—sits at 22%, reflecting the stock’s overall performance against current prices. For additional option ideas, visit StockOptionsChannel.com.

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Also see:

• Institutional Holders of SCC
• Top Ten Hedge Funds Holding FMAG
• MATW YTD Return

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