BY ANDREW GIOVINAZZI
January 08, 2024
Yo Pit Crazies,
0DTE is raging because Mark and Licia have done a great job waiting for entry points. The noise from our Pro Chat room is below.
As much as I love the 0DTE challenge, it is time to talk about Apple Inc. (Ticker: AAPL), that 3 Trillion Dollar behemoth of a phone company. Of all the Mag 7, it is the only one down 10% from the December highs. The Bulge Bracket firms are downgrading it like crazy and it gets their clients out of the name for great prices. Selling at the top never gets old. I could argue a good chunk of the retreat from 4800 to 4700 is due to AAPL down 10% from the top.
Note the chart above has few white candles the last two weeks.
It does not look good.
The goodies are in the short term vols
AAPL will not have 0 DTE options until the SEC approves a cash settled index for an AAPL spot price. That will happen in 2024 is my prediction. At least the application will go in. That will unleash option nirvana for traders.
The real opportunity is in the short term options. AAPL looks poised to break below $180.
30 day implied volatility is jumping due to earnings. AAPL might have to deliver real rev growth. But for now the chart is one way down. SPX cannot go up while AAPL goes down. It at best treads water. I think that is a recipe for lower SPX and VIX staying in the low 13s to 12s while the market churns.
The flatter realized vol in AAPL just means the stock is going in one direction that is down. Those cheap weekly puts are the best way to handle it.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
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