Biting Apple for an experiment

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This is something I am trying out for first time. This is a double calendar spread on AAPL and I did this to take advantage from the IV diffrence and contrary to popular belief, I purchased the expensive one and sold cheaper one. The reason why I did this is to benefit from potential IV rise in the Aug leg of the calendar as the earnings will be announce on July 25th, after Jul expiration and hence the IV for Aug should rise even further till earning announcment.

2007-07-02-aapl-dc-risk-profile.png    aapl-dc-jul-2-2007.png

If this happens, this trade should gain two fold 1) from decay of July short options and 2) gain in Aug premium due to rise in IV leading to aaple earning announcement date.

Discuss it here at the forum.

Profitable experimenting, OP






One response to “Biting Apple for an experiment”

  1. […] I bit apple for a IV experiment. The results are great and despite a huge 16% run-up in the stock since opening the trade, the […]

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