Investment ideas and observations about the real markets we know and love.
Now that the extreme levels of worry surrounding Apple’s earnings have subsided, and options prices have come back down to Earth, investors who wrote high-priced naked puts prior to earnings can close for a quick profit, await expiry and hope to keep the entire option premium, or consider rolling out to a future month.
With Apple’s quarterly earnings report just around the corner, prices for the stock’s options are being pushed upward by a spike in implied volatility far above historical levels. For investors who would be willing to buy Apple anyway, naked put writing provides an opportunity to profit from the inevitable fall in implied volatility once the results are in.
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