Why not: Apple (AAPL) options during current fall

Davis MartinDavis Martin ·

The broad statement: Of all the big tech stocks out there — and despite its status as the biggest-money company in town – Apple Inc. (AAPL) is the most boring to trade options on because it’s the least volatile. As a result, I have found other technology names to be much more lucrative.

The set-up: Apple continues to fall after people aren’t taking super well to their Apple watch and the new generation (meaning expensive) iPhones. Markets have been slightly red, but not by much. A lot of this could have to do with Apple simply being so enormous and being in seemingly every index fund and owned by every portfolio manager.

Through all of this, I’ve seen a ton of people trade calls and puts on Apple (but I only know one person who has made any money on it).  Not once have I made a trade or alerted my members on this one.

Why others are trading Apple: Truthfully, I believe they are guessing. The company is so big and people feel like they know it, but you need more than a “feel” and a guess to make money trading.

Why I’m staying away from the stock’s decline: The way this market has been working, if Apple keeps falling it will find buyers sooner or later. I may actually look to be one of those buyers if it has a large gap-up to fill.

I don’t know when this will take place so I don’t have an option priced yet; I will wait for Apple to form a base and then decide whether or not buying to open call options is a worthwhile trade.


Davis Martin is the head trader at Dailyprofitmachine.com. He trades SPY calls and puts and swing trades individual stocks and stock options. At the time this article was published on RagingBull.com, he had no shares, options or open orders in AAPL, having last traded weekly calls in the stock as a scalp trade in July, making a 20 percent profit in a day trade.

Be a Better Stock Trader, Starting Today

Get the expert insights, tips and strategies you need to optimize your trading skills and profiles