Here are three ways to play it.
If You are A Believer in Apple: I am. I own shares in the best, cheapest company and stock on the planet. Buy the shares – they are roughly $495 as you read this – and sell the September Week Two $500 calls ( that’s AAPL130913C00500000 for the regular weeklys, or AAPL7130913C00500000 for the minis). If you get called out (you want to get called out) you net $8 per share, with a mini-call, that is $80 a contract, with a full contract, $800. Your profit is 0.8% or 40% on an annualized basis.
If You are Not A Believer (At These Prices): Sell a put at a price lower than the current stock price. You could sell the September Week Two $490 puts (AAPL130913P00490000), and if the stock stays above that price, your annualized return is 15%. Or you could sell the September monthly puts (AAPL130921P00490000) at that price and if the put expires worthless, the return is 38%.
If You are Flexible and Want To Avoid the Announcement: Sell something that expires this week. If you buy the stock at $495 and change, and sell this week’s $495 calls (AAPL130906C00495000), you net about 1% in four trading days, or 50% on an annualized basis, assuming you get called out or can sell the shares for what you bought them. If you sell a $495 put, you do about the same, assuming you are not put the shares.
What looks best? If you think the stock will hold at these prices, go for the highest return – that is your job, right? Sell the weekly put — that $5 will erode over time, and you will probably be able to buy them back before expiration. That being said, the stock could turn around and fall and then you will have to roll the position into next week — into the announcement week. It is up to you.
Oh, what if short term traders still using Blackberries (BBRY) are killing you – as they are me – because Apple is really the cheapest company and stock on the planet? Buy AAPL shares and sell calls every week or month, forever.
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