The options market is implying a move of 4% in either direction.
On CNBC’s Options Action Monday, Dan Nathan suggested that investors with a long position in Apple who fear their shares could make an extreme move to the downside today should consider setting up a collar:
He would sell the May 212.50 call for $2.15, against a long stock position of 100 shares and use the proceeds to buy the May 192.5 put. The trade offers protection below $192.50 and it limits upside to $212.50. Investors can maximally lose $11.80 with the trade, which is a difference between the current stock price and the strike of the put. [via Benzinga]
Friend-of-the-blog Vic Castroll, who’s been predicting an extreme move to the downside for some time, tweeted this advice:
— tradervic (@tradervic21) April 26, 2019
Disclaimer: Since I’ve never owned Apple and have never been much of a trader, I have nothing to add. Don’t blame me if you drain your IRA doing something you read about here.
Cue CNBC’s video:
Here’s how to trade Apple ahead of earnings from CNBC.