“It could be a good time to place bets on Apple,” Alex Rosenberg reports for Bloomberg. “Goldman Sachs’ options team points out that Apple options prices are very low, especially when compared with S&P 500 options.”
“Since they believe there is a higher chance of Apple shares making a big move than the market currently appears to expect, Goldman strategists Katherine Fogertey and John Marshall recommend the purchase of a ‘straddle’ on Apple, which is a trade that entails purchasing both a bullish and a bearish option in order to play for a move to either the upside or the downside,” Rosenberg reports. “A less expensive strategy would be to simply bet on either a rise or a fall, by buying a call or a put.”
“Either way, the options market’s opinion about Apple certainly does appear to be shifting,” Rosenberg reports. “An examination of data provided by FactSet shows that the implied volatility (a measure of expected future moves that is computed from options prices) of Apple shares compared with those of the SPDR S&P 500 ETF has fallen dramatically in recent years.”
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