$AAPL volatility is very high

$QQQ volatility is very high

The underlying volatility in $AAPL is very high.  $QQQ realized volatility is also very high since market players decided to revalue all of the high octane technology names.  FANG stocks got shellacked from the lofty perch they were sitting on.  $FB’s multiple is much lower, $AMZN somewhat and $GOOGL too but holding up.  $AAPL’s worry is that they cannot follow the iPhone /iPad magic into the next generation of users and innovate in the iPhone era.  That worry has traditionally kept $AAPL at lower multiples than the other FANG’s.

$AAPL suffers massive volatility

 

Every so often in $AAPL’s history there comes a time of big tumult.  Those time are after $AAPL hit pre-split $600, level, the 2016 China Syndrome and Now.  Tech Wreck Nov 2018 is mostly due to $AAPL after earnings.  I think many players were looking for $AAPL to lead out and they did not do it.  What we are left with is $AAPL realized volatility in rare spot.

 

 

 

 

 

$AAPL Charts by LivevolPro.com from Cboe.

Long term versus short term trading

 

These periods last a while historically.  While past performance is not indication of future returns, higher volatility ugly usually last a while but then $AAPL emerges on the next leg.  90 Day realized volatility is very high.  Remember this is the volatility of the underlying, close to close, over the last 90 days.   Short term any bearish trade looks decent to me.  Put butterflies or any cheap put spreads have real potential in this environment.  If one is a longer term bull, this historically is  a buying opportunity in $AAPL.  The higher realized volatility drifts away and $AAPL makes it’s slow, power move back up.  In that case selling some out of the money put spreads would work ok as entry point.  The AAPL Jun21 170/190 put spread prices around $7.

Somewhere between the two extremes there is a trade.  Long the AAPL gamma with a short delta, and short the long term Vega with a long delta could work very well.   That sounds confusing but it really is not.

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