DailyPlay – Opening Trade (AAPL) – October 4, 2023

AAPL Bearish Opening Trade Signal

View AAPL Trade

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish

Details: Buy to Open 5 Contracts Dec 15th $170/$155 Put Vertical Spreads @ $3.94 Debit per contract.

Total Risk: This trade has a max risk of $1,970 (5 Contracts x $394) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $394 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is in a bearish trend and is expected to continue lower.

1M/6M Trends: Bearish/ Mildly Bearish

Relative Strength: 7/10

OptionsPlay Score: 145

Stop Loss: @ $2.00 Credit (50% loss of premium paid).

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

Please note that these prices are based on Tuesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

Investment Rationale

With the S&P 500 firmly below the $4330 support level and 10-year yields now within spitting distance of 5%, the only market hanging on is the Nasdaq-100. I see risks building that the Nasdaq and big tech will break its support level at risk of a major pullback. We reduced our exposure last week on AAPL with the concern that markets were at a crossroads and could potentially rally in the short run. Those odds are reduced at this point and I’m advocating that we add bearish exposure in AAPL again to our portfolio. This time buying downside exposure in the form of a put spread into year end. Buy Dec $170/$155 Put Vertical @ $3.94 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 5 Contracts for a risk of $1,970. We will set a stop loss on the put spread at around 50% of the premium paid @ $2.00 Credit.

AAPL – Daily