AAPL EARNINGS -- NOT YET RIPE FOR A PREMIUM SELLING PLAY
With earnings to be announced on 7/21 after market close and with IVR currently at 64, AAPL is not yet ripe for a premium selling earnings play. Ordinarily, I look for IVR to be >70 before considering an earnings play short strangle or iron condor. In all likelihood, though, I will overlook the IVR being below 70 and go ahead and make a play, since IVR will contract post earnings .... .
Possible Set-Up: July 24 118/122/137/141 IC for .77 credit, POP 71%, BE's at 121.23/137.77, BPE $323.00.
Alternative: July 24 122/137 short strangle for 1.35 credit, POP 74%, BE's at 120.65 and 138.35, BPE varies by broker (unlimited risk).
Expected move between 124 and 134 strikes.
NOTE: Where I have sufficient BP available, I generally prefer short strangles due to higher profit potential, lower commission cost, and ease of trade management (rolling for duration/credit) in the event a side is tested.
Possible Set-Up: July 24 118/122/137/141 IC for .77 credit, POP 71%, BE's at 121.23/137.77, BPE $323.00.
Alternative: July 24 122/137 short strangle for 1.35 credit, POP 74%, BE's at 120.65 and 138.35, BPE varies by broker (unlimited risk).
Expected move between 124 and 134 strikes.
NOTE: Where I have sufficient BP available, I generally prefer short strangles due to higher profit potential, lower commission cost, and ease of trade management (rolling for duration/credit) in the event a side is tested.
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