Options Corner: AAPL Earnings Ahead

Core Insights - Apple has underperformed compared to the S&P 500 and the tech sector, with a performance of approximately 17% versus 32.5% for the tech sector [2] - The stock is currently at all-time highs, with a bullish trend observed in the price movement [4][6] - Anticipated earnings results are expected to show a relatively low implied volatility of about 3.3%, indicating a potential for significant price movement [9][10] Technical Analysis - The stock has broken out to new highs, with previous resistance levels now acting as support around 265 [4] - The RSI indicates strong momentum, nearing overbought territory, which is common before earnings events [6] - Key support levels are identified around 255 and 243-244, aligning with standard deviation channels and volume nodes [7] Earnings Expectations - Preliminary sales for the iPhone 17 are reported to be 14% higher than last year's iPhone 16, contributing to elevated expectations for the upcoming earnings report [10] - A trading strategy is proposed that does not require direction prediction but anticipates a move beyond the expected $9 range post-earnings [11][15] Example Trade Strategy - The proposed strategy involves buying an out-of-the-money call vertical (280 strike call, selling 285 strike call) and a put vertical (buying 265 put, selling 260 put) [12][13] - The trade requires the stock to move above 282 or below 262.80 to break even, with a risk of $220 and a potential profit of $280 [13][14] - Active trade management is emphasized, particularly if the stock opens below key levels [14]