Apple, the world’s most valuable company, is gearing up for a pivotal earnings report scheduled for after the bell Thursday. One options trader has placed a huge bet that the AAPL bottom is in.
″[They are] selling nearly 20,000 contracts of the 150, 145 and 140-strike puts that expire this Friday, collecting about $770,000 in premium, betting that the stock will be above $140 by expiration. But, if it’s below $140, [they have] $290 million of stock purchase obligation,” Zhang said.
This particular trade includes a sale of 9,998 contracts of the 145-strike puts, alongside 4,999 contracts of the 150 and 140-strike puts, each. It also highlights the asymmetric risk-reward profile of selling premium, especially in a volatile market.
MacDailyNews Take: Nobody has ever bet enough on a winning horse.
Apple is currently trading at $159.13.
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