Are you looking to capitalize on market moves in the upcoming earnings report for Apple? Well, according to Goldman Sachs, options traders may have an opportunity to do just that.
In a recent note to clients, John Marshall, head of derivatives research at Goldman, expressed optimism about Apple’s earnings report scheduled for August 1st. He highlighted the potential for a positive surprise, especially in light of solid growth expectations for iPad/Mac and Services.
Investor focus leading up to the earnings report is expected to center around iPhone demand, AI investment, and valuations. With the market anticipating significant movement in the stock price surrounding the report, now might be a prime opportunity for options investors to position themselves bullishly.
Goldman Sachs specifically pointed out the $225 strike price straddles expiring on August 9th as a strategy to capitalize on earnings-related volatility. A straddle involves simultaneously buying a call option and a put option on a stock with the same expiration date and strike price, allowing investors to profit from volatility regardless of which direction the stock moves.
While the initial cost of a straddle may be higher than a one-way put or call option, potential losses are limited to the upfront cost of the options contract. It’s worth noting that the Goldman note was written before a recent tech sell-off that saw Apple’s stock price drop 2.9%, so investors may want to consider alternative strike prices as well.
Overall, shares of Apple have seen a 13.5% increase year to date, on par with the S&P 500. The stock experienced a notable surge in June following the unveiling of new artificial intelligence features at the developers conference.
If you’re considering making a move in the options market surrounding Apple’s upcoming earnings report, stay tuned for further insights and analysis on Extreme Investor Network. Our experts will provide valuable information and strategic recommendations to help you make informed investment decisions.