Trading an Apple Inc. (NASDAQ: AAPL) bull put spread

This trade is solely based on statistics and is taking advantage of the swollen downside front-month puts in Apple Inc. (NASDAQ: AAPL). The sharp market replacement and global economic contagion that is spreading today is causing a jump in implied volatility. This jump can work to the advantage of investors who are bullish on AAPL.

We did a search looking for high-probability trades based on historical volatility and the ONN Idea Generating Platform (IGP) returned AAPL as one of the choices.

AAPL Credit Spread Trade Details:

AAPL is currently trading at $193.36.

Credit Spread/Bull Put Spread–

• Sell the February 180 put
• Buy the February 170 put
• Net credit of $0.80 for the spread

By opening a free virtual trading account with OptionsHouse, you can build a profit/loss diagram to help visualize this trade.

Profit/Loss Details:

Maximum profit: $0.80 (the credit collected).

Maximum risk: $9.20 (the difference between strikes minus the credit collected). Return on risk is approximately 8.7% in 15 days.

Breakeven: $179.20 (the strike of the short put minus the premium).

For more on AAPL:

Early Glance: Computer companies

Apple (NASDAQ: AAPL) volatility drops after iPad announcement

Apple (NASDAQ: AAPL) options volume tops Tuesday action

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