Earnings season has already had some big surprises. One of the companies that absolutely blew the doors off expectations was Apple (AAPL).
AAPL beat Wall Street’s revenue estimates by $8.19 billion and earnings estimates by $0.27 per share — coming in at a massive $111.43 billion and $1.68 per share, respectively.
The biggest surprise came in iPhone sales. Analysts were expecting AAPL to generate $59.86 billion in revenue from iPhones, but the company generated $65.6 billion as consumers gobbled up the new iPhone 12.
With all this money coming in, AAPL has also declared a dividend of $0.205 in an effort to return profits to shareholders.
So, how has Wall Street reacted to all this great news? They have taken profits off the table.
AAPL was trading just below $145 before earnings, but the stock fell all the way back down to $130 as nervous investors locked in gains.
Daily Chart of Apple (AAPL) – Chart Source: TradingView
However, AAPL appears to be rallying again, and we expect the stock to continue climbing higher.
To take advantage of this, we like the idea of selling to open a new put option to generate income.
We think a strike price around $128 should give the stock enough little wiggle room to re-test support at $130.
We’d also consider an early March expiration because it provides a full month’s worth of time value for our premium.
On the date of publication, John Jagerson & Wade Hansen did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
John Jagerson & Wade Hansen are just two guys with a passion for helping investors gain confidence — and make bigger profits with options. In just 15 months, John & Wade achieved an amazing feat: 100 straight winners — making money on every single trade. If that sounds like a good strategy, go here to find out how they did it.