Well we've all been most likely watching apple fall into correction territory the past week with the market still attempting to make its decision on whether it wants to fall further or continue its run. After a small after market chat with a fellow trader we both came to the conclusion that AAPL will most likely fall into a period of consolidation with bulls accumulating at the lows , and bears accumulating at the highs. This indecision is clearly outlined on the Weekly chart, with the forming a $10 range. Closing almost exactly in between the range.
- I have my eyes on the Weekly Exp . 116 STK Straddle, with the larger amount of profit made if price heads back down to support.
- Anyhow, we will have to wait and see how AAPL opens on Monday to make the final decision on the strike for the straddle.
Good question, the reason why its only weekly options on this one is because I don't want any trades that'll last 1week+ at the moment. And I don't want to simply buy calls because if we fall into consolidation they'll lose more value / gain much less, also I have no bias on AAPL (Bearish or Bullish) hence the reason for straddles. If price really doesn't do anything and the options lose value or I believe it will continue falling/rising then I can always roll the expiration on either contract. Hope this answered your question. =D