Exploring New Opportunities
Investors trading the options of Apple Inc (AAPL) witnessed the initiation of trading for the December 2026 expiration today. With 1001 days remaining until expiration, traders now have a fresh set of contracts to consider.
Unlocking Value in Options Contracts
One significant factor affecting the pricing of options is time value. The new December 2026 contracts offer sellers of puts or calls the potential for higher premiums compared to nearer expiration contracts.
Strategizing with Put Contracts
For instance, the put contract at the $170.00 strike price presents an intriguing opportunity with a current bid of $17.55. By selling-to-open this put contract, an investor agrees to buy the stock at $170.00 but also collects the premium, effectively lowering their cost basis to $152.45.
Charting Possible Outcomes
The $170.00 strike sits approximately 1% below the current stock price, indicating that there is a 70% chance the put contract will expire worthless, offering a 10.32% return on the initial cash commitment.
Considering Call Contracts
Conversely, the call contract at the $200.00 strike price, with a current bid of $21.00, enables investors to sell the stock at $200.00 if they purchase shares at the current price level of $171.54/share and sell-to-open the call contract.
Assessing Risk and Reward
Although there is a 45% chance the covered call contract will expire worthless, the investor still retains both their stock and the premium received. This extra return opportunity equates to a 12.24% boost, or 4.46% annualized.
Volatility Insights
The implied volatility stands at 28% for put contracts and 23% for call contracts. The trailing twelve-month volatility, calculated at 19%, offers a broader perspective on market movement.
