This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

One Put, One Call Option To Know About for Apple

AAPL+Dividend+History+Chart

Turning to the other side of the option chain, we highlight one call contract of particular interest for the October 2014 expiration, for shareholders of Apple Inc (AAPL) looking to boost their income beyond the stock's 2.2% annualized dividend yield. Selling the covered call at the $690 strike and collecting the premium based on the $19.20 bid, annualizes to an additional 4.1% rate of return against the current stock price (this is what we at Stock Options Channel refer to as the YieldBoost), for a total of 6.3% annualized rate in the scenario where the stock is not called away. Any upside above $690 would be lost if the stock rises there and is called away, but AAPL shares would have to climb 21.9% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 25.3% return from this trading level, in addition to any dividends collected before the stock was called.

START SLIDESHOW:
Top YieldBoost AAPL Calls »

The chart below shows the trailing twelve month trading history for Apple Inc, highlighting in green where the $495 strike is located relative to that history, and highlighting the $690 strike in red:

Loading+chart++2013+TickerTech.com

The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the October 2014 put or call options highlighted in this article deliver a rate of return that represents good reward for the risks. We calculate the trailing twelve month volatility for Apple Inc (considering the last 251 trading day AAPL historical stock prices using closing values, as well as today's price of $566.03) to be 29%.

In mid-afternoon trading on Monday, the put volume among S&P 500 components was 665,007 contracts, with call volume at 1.30M, for a put:call ratio of 0.51 so far for the day. Compared to the long-term median put:call ratio of .65, that represents very high call volume relative to puts; in other words, buyers are preferring calls in options trading so far today. Find out which 15 call and put options traders are talking about today.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,169.72 -205.04 -1.25%
S&P 500 1,925.53 -25.60 -1.31%
NASDAQ 4,692.5850 -40.9120 -0.86%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs