AAPL Jan 100 c's are 1.30 bid with the stock at 96.24. Jan 90 p's are .65 bid. How likely is it to blow up or go crazy so soon after the iphone hysteria? Liking the strangle here.
You never know. It could also trade flat after earnings. A strangle on RIMM would have lost money, yet RIMM has a history of huge moves during earnings.
I was thinking short the strangle. Most likely they report inline to slightly up, with any disappointment alleviated by iphone anticiaption. Could it rally 5 bucks by Friday? Sure, but what are the odds?
You mean long? If you think they end up above 102 or below 88 it would be ok, but remember these options will halve their timevalue tomorrow. Otoh, I'd be nervous to short that straddle . EDIT: our posts crossed. I agree with the analysis that it is probably a non-event. Still, a lot of retailers in AAPL now, hard to predict what they'll do. At least track it on paper. Ursa..
Earnings announcement due today (Wednesday) after market close. Interesting that IV on current month options has already fallen back. I don't know the Why...only the What. With January option IV a fraction of what it was just last Friday...so much for a short strangle. The restatement effect of the stock option mess did lower earnings, but I haven't come across anyone who gives a damn about current or prior quarter EPS. Bob
I don't think IV's are very reliable two days before expiration. Still, the 100 c's are 80. Pretty high.