Buy call option – at the money / in the money / out of the moneyDefinitions
Buy call option – a stock option is the right to buy a stock (but not the obligation) at a certain price for a limited period of time. The price at which the stock may be bought is called the striking price.
Three terms describe the relationship between the stock price and the options striking price: At the money / In the money / Out of the money
For example; stock XYZ trade at $100
At the money – the strike price of the option is $100
In the money - the strike price of the option is $90
Out of the money – the strike price of the option is $110
The strike price is one of the 6 factors that determine the price of the option.
Those factors are:
1. The price of the stock
2. The strike price of the option
3. The time until the option expires
4. The volatility of the stock also called “implied volatility”
5. The risk-free interest rate (usually the 90-day treasury bills)
6. The dividend rate of the stock.
The last two have less influence on the option price.
The option pricing has two elements, “time premium” and “intrinsic value”.
In this post, I’m not going to elaborate on those two. (But they are important to understand).
The Delta
The delta of an option is the amount by which the call option will increase or decrease in price if the stock moves by 1 point. The values of the delta are between zero to one, if the call option is in the money the delta is closer to 1 if the call option is out of the money the delta is closer to 0.
For example; if the stock option has a delta value of 0.8, this means that if the stock increases or decreases in price by $1 per share, the option price will rise or fall by $0.8.
The option pricing is based on a partial differential equation because of that the behaver of the option pricing is not linear, as we can see from the charts.
In the right chart, we see In the money option with a delta of 0.92, meaning the option price is behaving very similar to the stock price, we see that the lines are nearly flat.
In the left chart, we see Out of the money option with a delta of 0.12, meaning the option price does not move like the stock price, for every $1 the stock will move the option price will move $0.12.
Also, note the difference between the profit lines, to make 3 points with In the money option the stock needs to move to above $190, but the Out of the money option needs only to move above $145.
This was the profit side, the losing side as you can see if the stock will remain at the same place the In the money options will break-even while the Out of the money options will expire worthless and will lose 1 point.
The options that were used (input):
Right chart: Option price -> $25.9, Stock price -> $115 , Strike price -> 90$ , Interest rate -> 0 , Days to expire -> 56 , Implied volatility -> 40.8%
Left chart: Option price -> $1.17, Stock price -> $115 , Strike price -> $140 , Interest rate -> 0 , Days to expire -> 56 , Implied volatility -> 40.8%
One option contract is the right to buy 100 shares so the cost for the options would be: $2590 and $117 respectively, not include commissions.
For clarification: If you hold it to expiration and it is not worthless, that means you need to buy 100 shares at the strike price, $9000 in the right chart, $14,000 in the left chart. (not include what you already paid)
AAPLC trade ideas
#AAPL to the dirty NASDAQ:AAPL Dark cloud cover on the weekly looking a bear week for AAPL well the start of the week
Apple will now probably test support down towards USD 190.00Technical Analysis of Apple Inc. (ticker on Nasdaq: AAPL)
The Apple share has shown strong development both in the short and long term, and within an upward trend.
Now it is sometimes the case that even strong trends come to an end, (cf. chart back to the strong rise for the share in the first half of 2023).
Now the share has shown a correspondingly strong development in the past six months, but now the share may face another downward correction, and within the long-term upward trend that the share is moving within.
There are occasional downward corrections and testing of support levels such as the 50-day and 200-day moving averages, and another such test of key technical support levels is now indicated by the overall technical picture for Apple stock.
That will mean a correction down to around USD 188.00 - 208.00.
There may well be a correction down to the lower trend line in the long-term rising trend as well, and in that case it will mean a correction down to around USD 180.00 - 185.00.
The overall technical picture for the Apple share, short-term and long-term, therefore now signals a correction for the share, and to somewhere between USD 180.00 - 208.00.
On Friday, the share ended at USD 224.38.
AAPL expected correction and buying areaDue to an engulfing pattern and completion of 5 wave impulsive Elliott wave pattern, I expect Apple to correct to price levels below in black from where I expect it to rally to new all time high.
AAPl: Breakout and RetestBreakout and Retest
Disclaimer: only for education purposes, no buy or sell recommendation. we are not sebi registered. always discuss first with your financial advisors
Magnificent 7 Long IdeaThe mag 7 has finally pulled back some, things seem rough right now, but I think we could see a bounce soon. We have this major trendline that we broke above previously, I expect it to hold. If it doesn't, yet another fakeout to the upside that will likely cause a lot more damage in the future.
$AAPL short term range $242-214Think NASDAQ:AAPL is likely to continue the trend higher here and squeeze up to the $242 level.
Once we hit that, I do think we'll see a sharp selloff back down to the $214 level.
My plan is to enter puts once we hit the top level because I think we should see a swift pullback and there should be large gains to come from that.
I'll update as price action continues to play out.
Apple (AAPL) Stock Pulls Back Within Bullish ChannelThis chart displays the stock price movement of Apple Inc. (NASDAQ: AAPL) over a period from late April to mid-July 2024. Here's an analysis of the key features:
1. Trend: Apple's stock is in a strong uptrend, moving within an ascending channel defined by green and red trend lines.
2. Current price action: The most recent candle shows a significant drop, with the price at $224.18, down $4.70 (-2.05%) from the previous close.
3. Support and resistance: The lower boundary of the channel (green line) may act as support if the price continues to fall. The upper boundary (red line) has been serving as resistance.
4. Volume: The volume bars at the bottom show trading activity. There's been consistent volume throughout the period, with some spikes coinciding with price movements.
5. Price levels: The stock has moved from around $170 at the start of the chart to over $220, representing significant growth.
6. Recent pullback: After reaching the upper boundary of the channel, the price has pulled back, which could be a normal retracement within the uptrend or the start of a larger correction.
7. Market sentiment: Despite the overall bullish trend, the recent sharp pullback might indicate some short-term bearish sentiment or profit-taking.
In conclusion, while Apple's stock has been in a strong uptrend within the ascending channel, the recent pullback suggests some caution. Traders and investors might be watching to see if the price finds support at the lower channel boundary or if this could be the beginning of a more significant correction. The stock's ability to maintain its position within the channel will be crucial for determining the continuation of the uptrend.
My Latest Open Source Indicator: Stef's Dollar Volume CounterStef's Dollar Volume Counter is my second script that I've worked on and coded. It is free and open source for everyone! Get it here:
I am proud of this script because it does something very, very important: it counts the amount of money traded, not just the number of shares or contracts. In this educational post, I want to share why I think it matters and explain some concepts of markets along the way.
1. This is key for understanding where the big and small money is flowing in the market. By focusing on the dollar volume, traders can gain insights into liquidity and significant money movements over time.
2. Watch the money, not the shares. This script is totally different from other volume scripts because it shows the amount of money traded, not just the shares, contracts, or coins. More importantly, it stands out from other volume indicators because it specifically showcases dollar volume amounts either as a table or a label. This focus helps traders track the sheer money movements.
3. Know your perspective! I personally am most pleased with two important features that the indicator offers: it shows the Dollar Volume Counter table that illustrates the highest and lowest and average dollar volumes over a specific period that YOU can customize in the settings menu.
Fun little feature: In the spirit of Doge, I added a text lable that says "Wow! Much Money!" which highlights the top three recent highest dollar volumes within the visible chart area, emphasizing significant trading periods. You can toggle this on or off in the settings menu.
Thanks for reading! I look forward to hearing your feedback.
Apple - Caution at the all time high!NASDAQ:AAPL just created a new all time high, however we have to be quite careful now.
Trading cycles in an overall uptrend is one of the most profitable trading approaches. You are trying to capitalize on the major upswings and missing out on the major downswings. Apple is currently retesting resistance and probably creating the top of the previous cycle. I am waiting for a move back to support before we will then see the next major bullish cycle on Apple.
Levels to watch: $240, $170
Keep your long term vision,
Philip - BasicTrading
AAPL - Magazine Cover Setup!
In February 2024, we published an analysis indicating a sell in two targets; however, only one target was achieved.
Apple showed resilience and continued its stable path of continuous appreciation.
An Elephant Bar was what broke the resistance line, and the operation still has the support of the Fiboclouds that aligned and compacted in the H4, D, and W timeframes. This movement suggests a continued breakout towards the first target.
We project the best buy point to be a pullback equivalent to a 2/3 correction of the Elephant Bar candle that initiated the breakout. If this projection is realized in practice, and a partial realization occurs at the first target, the stop loss should be moved from its initial position to the same line where the position was entered.
This way, the journey towards the final target will proceed with reduced risk of losses and the preservation of the partial gains achieved so far.
Follow us to receive notifications of new trades as well as frequent updates on ongoing trades.
150 Follo(W)er Double Bottom on #61Fib Thank you to all the new followers out there.
For your dedication, here is a very nice simple setup imo.
The W / Double bottom is clear, and its on a nice Fibonacci level here as well...
Target; $240 by end of Summer.
I expect Apple to integrate more and more AI with every update / new product , and it's not that bold of a call.
NEXT CHART @ 300 Followers ;)
(I'm trying to relax here!)
AAPL short to $190-$200 rangeJust pattern recognition encouraged by expected overall markets pullback thanks to US elections.
Is it Time for the Magnificent 7 Collapse?The mag 7 showed some weakness this past week for the first time in a long time. It has essentially gone straight up since April. We had the big drop on Thursday after CPI, but of course it quickly recovered on Friday. I think many are feeling optimistic after that recovery, but I'm not convinced. I've obviously been bearish for about a month now and it hasn't panned out yet, so take it with a grain of salt. Picking the top is hard, but TA can assist. And if it keeps going, money can be made on the long side.
This could be a huge ascending wedge break to the downside that sends the mag 7 back down towards the lows in May. A lot of charts are looking similar to how they looked before the sell off in April, but so far betting on continued downside has been a losing bet. It's important to wait for confirmation and avoid shorting before it is time. We can use basic trendlines and VX analysis to determine when it is time. If we see a break to the downside soon and VX comes alive, we'll know we have a sell off that has legs. It may be similar to April and only last a couple of weeks, but it could be a quick elevator down.
I'll be watching all of the mag 7 along with ES, NQ, and VX for any clues of what's to come. I think things are in a dangerous spot right now, buying up here could be a terrible mistake, but so could shorting or staying cash. We need confirmation first. If we see a strong VX with some bearish trend breaks on the mag 7, it'll be a lot safer to short. Patience pays.
AAPL STILL A SELL!!! $222 then $203 are targetsAAPL very bearish patterns SELL signal printed, AI bubble deflating looking at other SPY stocks so down she'll go
Apple stock is flying nice to try nowBroke out of the all time high level. Since in september new apple products will be availabel for sale and AI things around Apple will trigger this stock.
ApplePair : AAPL - Apple Index
Description :
Completed " 12345 " Impulsive Waves
Resistance Level
Break of Structure
RSI - Divergence
Rising Wedge as an Corrective Pattern in Short Time Frame
Are we dealing with fake AAPL breakout? Apple's share price rose sharply on June 11th following its annual developer event, where new artificial intelligence features were unveiled. This pushed the price up to $220 per share. Although the price has since retraced some of these gains, it found support at the 50% retracement level of the move from $192 to $222.
The price also breached the key $197.85 level, which had capped the price in December 2023 and summer 2023. As long as the share price remains above $195, it is likely to continue pushing higher. The next resistance levels are $220 and $227.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
AAPL May 9, 2024: Possibly Good Entry PointI have been following NASDAQ:AAPL for a long time but have not bought it because it has been a laggard during the AI-powered uptrend since November 2023. You can see many of my posts regarding this stock in the related ideas section.
Situation might be changing now...
Following the earning reports with a huge buyback plan on May 2, the stock gapped up above its MA-200 and has been staying above until now.
The MA-50, although is still under MA-200, but started moving up.
The relative strength line has been moving up since April 10, before the overall market correction, and has been steadily going up.
Therefore I started to buy NASDAQ:AAPL here, with an expectation that it will make new high some time this year.
12 YEARS $AAPL REPET THE SAME PATTERN !!!!!!!Contact me if you want to learn more about TA and MONEY !
Apple - approaching a major top?Calling tops is usually a fools errand but the EW pattern here seems somewhat clear with some fib ratios helping add to the case.
Apple. Bull Call Aug 230/250Buy a Bull Call 230/250 for 16th August after earnings
Buy Call 230, Sell Call 250 for premium around $8.30 with potential profit of $11.70
That is a max profit of 140%
