by winston » Fri Sep 16, 2016 10:07 am
Stocks to Trade for 2017: Apple (AAPL)
There is no denying the value of Apple Inc. (NASDAQ:AAPL). This week’s price action solidified it as a gem that traders are eager to buy.
This current rally in AAPL stock makes it more difficult to retest the lows of May and June of this year, so I can be more confident placing bullish options spreads — especially if paired with bearish spreads into January.
The trade: Sell a Jan $100/$95 credit put spread for 72 cents per contract. This has an 85% theoretical chance of success and a 16% potential yield on risk. I can sell a Jan $130/$135 credit call spread, for 60 cents per contract, against this trade. This has an 80% theoretical chance of success and a 13% potential yield.
Taking both sets up an iron condor, for which I collect $1.32 per contract.
If AAPL stock stays between $100 and $130 per share through January, this trade would yield 30% on money risked. Breakeven points are $98.68 and $131.32 per share.
Source: Investor Place
It's all about "how much you made when you were right" & "how little you lost when you were wrong"