Shorting OTM put options
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Apple is an Analyst Favorite, But AAPL Stock Has Been Flat - Shorting Puts Is the Best Play
Yahoo Finance· 2025-12-30 16:48
Core Viewpoint - Shorting out-of-the-money (OTM) put options in Apple, Inc. (AAPL) stock has been a successful strategy over the past month due to the stock trading within a narrow range, with a price target of $325, representing a 19% upside from the current price of $272.93 [1] Group 1: Stock Performance and Price Targets - AAPL has traded between a low of $268.47 on November 7 and a high of $286.19 on December 2 [1] - Analysts have raised their revenue estimates, leading to a range of price targets for AAPL, with an average of $287.74, indicating a potential increase of 5.4% from the current price [4] - The price target range is estimated between $287 and $327, with a potential target of at least $306, suggesting a 12% upside from the current price [4] Group 2: Shorting OTM Puts Strategy - The strategy of shorting the $265.00 and $270.00 put options has proven effective, with premiums dropping from $2.27 and $3.40 to $0.13 and $0.61, respectively [5] - The January 30, 2026, expiry shows a $2.70 midpoint premium for the $260.00 put contract, translating to a one-month yield of 1.04% [6] - Investors can earn a 1% monthly income yield by agreeing to buy AAPL stock at a price nearly 5% below the current market price [7]