ALTB – Closed AAPL Earnings Trade – Dual Calendar OCT28/DEC2 113/122

AAPL gapped down but not all the way to our $113 strike. We are floating around $114 at this point and have a decent profit. If we waited until closer to the expiration on Friday we could possibly see a bit more profit but I am taking the money in hand right now.

This is an 18% return for an overnight trade. I can be pretty happy with that.

ALTB – Open AAPL Earnings Trade – Dual Calendar OCT28/DEC2 113/122

AAPL has its earnings tonight after the market closes. The IV on the short-term options is riding high at over 50% with longer term options trading down near 24%. My expectation is that the IV on AAPL will drop to roughly 21% after the announcement.
This gives us the opportunity to set up a dual calendar that uses the drop in IV to gain a solid edge in the trade. We are opening the trade before the earnings announcement and should close it either tomorrow morning after the open or if AAPL’s price is close to one of our target strikes we may choose to hold the trade until later in the week.