DailyPlay – Opening Trade (AAPL) – October 3, 2024

AAPL Bearish Opening Trade Signal

Investment Rationale

Apple Inc. (AAPL) has been rangebound between $215 and $232.50, recently rejecting the upper limit, suggesting it may revisit $215 before a breakout. Fundamentally, AAPL appears modestly overvalued, trading at a premium to peers despite only slightly higher growth, with its industry-leading margins not enough to justify the high valuation.

AAPL – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 5 AAPL October 25 $235/$240 Call Vertical Spreads @ $1.06 Credit 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.

Counter Trend Signal: This is a bearish trade on a stock that is trading rangebound and not expected to continue higher.

1M/6M Trends: Bullish/Bullish

Relative Strength: 10/10

OptionsPlay Score: 96

Stop Loss: @ $2.12 (100% loss to value of premium)

View AAPL Trade

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 Wednesday’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. 

View AAPL Trade