Another potential reversal for AAPL, with it’s recent gap down and then rising up today with a significant amount of volume. What to do, what to do.
For options traders, notice the chart I posted of the VXAPL, which measures AAPL options and tells you if they are cheap or expensive. Pretty handy aye?
AAPL options can be considered expensive when the VXAPL is really high, like it is now. In fact, today it spiked to a 8 month high of 45.51.
When the VIX is high it’s time to…
Here’s the old saying, “When the VIX is high, it’s time to buy. When the VIX is low it’s time to go”. Click to Tweet this quote.
Generally the VIX spikes (hit’s a high) when the market gets very bearish and is thought of as a “Fear Index”. In the case of AAPL’s VXAPL, it can also spike when a big event is coming up like earnings.
Aggressive AAPL traders look for these huge spikes in the VXAPL as an opportunity to sell options. Selling options works great when your able to catch these spikes in volatility because when volatility lifts like it is now, it only affects the extrinsic value of an option. This is all considered “time value” and will eventually come out of the option. I know I may be totally geeking out here, but some of my long term readers know that I’m a Option Greek Geek.
See how the AAPLTrader Community is trading AAPL stock right now at AAPLTrader.com
Important Questions for Shareholders
-What’s your profit and loss price levels?
-How much risk are you comfortable trading?
-Did you know you can generate cash flow while holding AAPL stock if the price drops?
Learn right now how to hedge your shares for any stock to generate cash flow at AAPLTrader University.
Is AAPL stock at support?
It’s a good sign for the bulls that the pivot of $518 earlier today was well above the $505 low, making it most likely a new swing high. However, the $590 resistance is a critical area to break through if AAPL wants to reach above $600 anytime soon.
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Micah is a stock & Options Mentor Helping traders become more successful! Specializing in advanced technical analysis, option spreads and the Greeks!
PS. Make sure you check out yesterday’s article The Apple Death Cross
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