DailyPlay – Opening Trade (AAPL) Closing Trade (AMZN) – April 17, 2025

Closing Trade

• AMZN – 30% gain: Sell to Close 2 Contracts (or 100% of your Contracts) May 16 $200/$175 Put Vertical Spreads @ $16.95 Credit. DailyPlay Portfolio: By Closing both Contracts, we will receive $3,390. We initially opened these 2 Contracts on March 2 @ $13.02 Debit. Our gain on this trade, therefore, is $786.

AAPL Bearish Opening Trade Signal

Investment Rationale

Apple Inc. (AAPL) is facing increasing macroeconomic and geopolitical challenges that threaten its elevated valuation and highlight potential downside risk. The company’s significant exposure to China, both through its supply chain and as a key consumer market, leaves it particularly susceptible to renewed tensions between the United States and China. Although some consumer electronics remain temporarily exempt from tariffs, the introduction of new 20 percent tariffs on Chinese goods, along with slowing global growth and weakening iPhone demand, creates a difficult environment for Apple’s margins and earnings potential. With the stock already down 27 percent from recent highs and trading at a premium relative to peers, the risk-reward profile has shifted to the downside. Apple is scheduled to report earnings on Thursday, May 1, after the market closes.

Following the recent tariff exemption news, AAPL attempted to build upside momentum above the 200 level in an effort to fill a previous gap down from the 220 area. However, the move failed, and the stock quickly retreated, closing yesterday at 194.27. This failed breakout confirms 200 as short-term resistance. Elevated volume during the reversal underscores the importance of this level. Since October 2024, AAPL has steadily underperformed the S&P 500, highlighting broader relative weakness. Momentum remains negative, with the MACD showing a sustained bearish crossover, the MACD line remaining below the signal line, and a persistently negative histogram. AAPL closed yesterday near a key short-term support around 194. If this area fails to hold, a decisive breakdown could open the door to a move lower toward the downside target of 170.

AAPL’s valuation remains elevated despite signs of growth deceleration and rising input costs from trade tensions. While net margins still outpace peers, the premium may be hard to justify given macro pressures and limited upside in key product segments.

• Forward PE Ratio: 27.25x vs. Industry Median 14.33x
• Expected EPS Growth: 9.82% vs. Industry Median 13.93%
• Expected Revenue Growth: 6.07% vs. Industry Median 5.07%
• Net Margins: 24.30% vs. Industry Median 2.38%

To express a bearish view, consider selling the AAPL May 30, 2025 195/205 call vertical, which benefits if the stock remains below $195 through expiration. With just over six weeks until expiry, this defined-risk strategy aligns with the short-term bearish outlook while limiting upside exposure in the event of an unexpected rebound.

AAPL – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 4 Contracts AAPL May 30 $195/$205 Call Vertical Spreads @ $4.83 Credit per Contract.

Total Risk: This trade has a max risk of $2,068 (4 Contracts x $517) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $517 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower over the duration of this trade.

1M/6M Trends: Bearish/Bearish

Relative Strength: 3/10

OptionsPlay Score: 117

Stop Loss: @ $9.66 (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 Thursday’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